When one major supplier--especially a service provider positioned as a premium brand-- announces new mobile promotional deals, in a highly-competitive market, it does not take long for the other contestants to respond.
In the U.S. market, Sprint launched new promotions. Then Verizon and T-Mobile US responded. Now the issue is whether AT&T will decide it has to move also, and what form that response might take, if AT&T concludes that its core postpaid, multi-line account base is at risk.
The most-recent wave of promotions has seen the return of some form of unlimited-use plan to all four leading mobile operators, zero rating of video and price discounting.
The Sprint unlimited plans offer unlimited mobile data, talk and text messaging for $50 per month for the first line (with automatic payment); two lines for just $90 a month; and the third, fourth and fifth lines supplied for free.
In other words, five lines cost just $90 a month. Some might note that, as always, the promotions are time limited, so the long term impact is hard to gauge. Some might argue that additional promotions tend to follow, until the suppliers reach whatever market share goals they have targeted.
Savings through March 31, 2018. After the promotional period is over, customers will pay an additional $10 per month for first line, the second line remains at $40 per month and each of lines three to five are $30 per month.
Verizon then launched new unlimited plans, something Verizon had eliminated in 2011. The Verizon Unlimited plan costs $80 a month, for unlimited data, talk and text, using paper-free billing and AutoPay features.
Both T-Mobile US and Sprint gained market share in the second half of 2016, presumably on the strength of aggressive “unlimited usage” promotions. Verizon previously had stopped selling unlimited plans in 2011.
At the moment, all four leading U.S. carriers offer unlimited usage plans of one sort or another.
Just prior to the Verizon announcement, Sprint introduced a new family promotion, offering five lines of unlimited data for $90 per month excluding taxes and fees. Sprint's promotion lasts through March 31, 2017.
A current T-Mobile US unlimited plan costs $180 plan for five lines and $160 plan for four lines, including taxes and fees.
Multi-user plans cost $45 per line for four lines. Some nevertheless are going to complain. After 22 GB of data usage on a line during any billing cycle, Verizon says it “may prioritize usage” in the event of network congestion. That “throttling” feature always is criticized in some quarters as a violation of the “unlimited” feature, but others simply see that as “fair use” policies.
Also included are up to 500 MB per day of 4G LTE roaming in Mexico and Canada.
T-Mobile US announced the addition of high-definition quality (HD) video and 10 GB of T-Mobile hotspot access, at no extra charge, with monthly taxes and fees included, for T-Mobile US customers on “T-Mobile One” customers, T-Mobile US says.
T-Mobile US also introduced a new offer of two lines on T-Mobile ONE for $100 a month.
The upgrades are available starting February 17, at no extra charge for customers on “T-Mobile One” service plans. Customers can simply activate their new features in the T-Mobile app or at my.t-mobile.com.
Previously, T-Mobile US had been offering unlimited video streaming--without usage charges on the customer’s mobile data plan--at standard definition. The latest move bumps up image quality, and also bandwidth consumption per minute of use.
Customers will get HD quality video streaming and up to 10GB of high-speed Mobile Hotspot data per month, so they can ‘tether’ a laptop or other device to access the Internet. And, after the included 10GB of high-speed data, customers still get unlimited 3G data through the end of the month.
As the latest move by T-Mobile US shows, unlimited data plans might have disruptive consequences.
Now that all four leading U.S. mobile service providers now offer some form of unlimited usage plan, consumer behavior and service provider behavior become crucial. Will consumer usage increase, and by how much, where and when? Will service providers keep the unlimited offers prominent in their marketing efforts?
If mobile network usage profiles change, how will that affect quality of experience on the various networks? And what will mobile service providers have to do to maintain quality in the face of increased network demand? How much can they do, near term?
In other words, will network congestion suddenly become a much-bigger issue?
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