When are carriers going to offer a data only plan?

September 20, 2012
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You’ve got to hand it to them. Carriers are really good at making money. Whatever it is you want to use they’ll work out the most expensive way to charge you. As our data demands grow, the carriers are moving the goalposts once again. The new shared data plans from AT&T and Verizon want to meter your data usage. A lot of people are wondering why there’s no data-only plan available on the market for smartphones. Well, you can rest assured that it’s coming soon, but will it be affordable? Not if the major carriers have a say.

Growing demand for data

There’s been a huge shift in the way we use mobile devices. We used to make phone calls (remember them?) and send text messages. Smartphones and tablets enable us to do so much more. The experience of web browsing on an old mobile phone was incredibly tedious. Games were basic, cameras were poor, apps were limited to simple calculators, and Facebook didn’t exist.

Nowadays we use our mobiles for all sorts of things and as our demand for voice minutes and texts has gone down, our demand for data has soared. A recent O2 study found that calls are now the fifth most popular activity on smartphones behind web browsing, social networks, playing games, and listening to music.

Death of unlimited data

Naturally the carriers have spotted this trend and their response has been to kill off unlimited data deals and switch plans around. You’ll now find unlimited calls and texts are common, but data is metered and so the more you use, the more they will charge you. Verizon and AT&T are trying to force their customers onto these new plans and claiming that unlimited data is unfeasible.

It’s worth pointing out that many carriers used to advertise “unlimited data” when what they actually meant was “limited data”. Here in the UK many standard contracts claimed to offer unlimited data and then included a “fair usage policy” in the fine print which effectively triggered throttling or a cut-off on your mobile data if you exceeded a monthly limit. That limit was often surprisingly low.

Better tech, the growth of 4G, and VoIP

Now we are in a situation where our smartphones are capable of providing a great online experience. We can browse full version websites, we can play online multiplayer games, and we can stream video. These are all key features used to drive sales of devices. On top of that the carriers have been improving their technology. Some of the enhanced 3G networks offer impressive speeds already and 4G is rolling out to bring us speeds that could enable real-time streaming of true HD video with no wait involved.

Combine that with existing VoIP service like Skype and the possibility of VoLTE services which are in development. Throw third-party BBM style apps and social media into the equation. What do you get?

We only need data

All of our needs can be catered for by a data only plan. Most of us aren’t using anywhere near our allowance for voice minutes and texts, but our data usage is creeping up all the time.

The barrier to you actually taking advantage of this new dawn in the mobile tech age is the crippling bills you’re going to get slapped with. Verizon and AT&T’s new plans are deliberately confusing and claim to offer advantages for you, the more devices you use. So you get charged for a shared bucket of data, you get charged for each individual device you add, and you get charged for any extra data you use at the rate of $15 per gigabyte (the old overage charge was $10 per gigabyte by the way).

At the same time you get unlimited calls and texts. Basically you can have an unlimited amount of something as long as you aren’t really using it much. When we didn’t use much data we got unlimited data on our plans, now that we don’t use many call minutes or texts we get them unlimited and data is metered instead.

These new metered plans are the probable face of data only plans.

The resurrection of unlimited data

Unlimited data looked to be a dead duck for a while there and virtually every deal claiming unlimited data actually had a “fair usage policy” that made it limited anyway, but we are now seeing some deals that claim truly unlimited data. This is largely an attempt by smaller carriers to compete with the big boys.

In the UK there’s Three, in the US there’s T-Mobile and Sprint, now offering truly unlimited data. There are plenty more that claim to, but actually apply limits. It’s also worth noting that none of the unlimited data deals allow tethering without at least making extra charges (so you can’t use your mobile as a hotspot). If you know of any other carriers with unlimited data deals in the UK, US, or anywhere else then post a comment and tell us about them. What carriers are offering good deals and what is your experience with them?

It will be very interesting to see if the big carrier’s argument that it is unfeasible to provide unlimited data will actually hold up. If they are telling the truth then we should see the carriers offering it going bust or being forced to change their deals.

Data only plans are coming

Back in June the AT&T CEO, Randall Stephenson, said

“I’ll be surprised if, in the next 24 months, we don’t see people in the market place with data-only plans…. I just think that’s inevitable.”

It’s no accident that data prices are going up as data usage goes up, even although improvements in technology and networks should be making it cheaper. The carriers have got to compensate for the falling revenue from calls and texts somehow.

You also have to consider the rise of the tablet market which creates a demand for data from devices that have no traditional call or text requirement or capability.

Who will be first to take the plunge and offer a data only plan? Place your bets.

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