Unlimited Plans: A Race To The Bottom?

In the last few years, many cell phone carriers have released “unlimited” plans that actually have limits. Most of these plans are sufficient for the average person. Problems show up for a minority of cell phone users that are especially heavy data users.

Many people read my posts explaining the limits carriers place on their “unlimited” plans and react with a version of:

Ok, fine Chris. Sure these plans aren’t technically unlimited. But you’re being pedantic as hell. These plans are as-good-as-unlimited for 98% of people.

My pushback on “unlimited” plans isn’t about protecting heavy data users. In the long run, I’m worried that “unlimited” plans are part of a trend that will be harmful to a much larger group of people: light and moderate data users.

Huh?

This has happened before

For more than a decade, I’ve been following the portion of the web hosting industry that caters to personal websites and small-business websites. When I first started watching the industry, almost every web host offered a fixed number of gigabytes of bandwidth each month. Customers that wanted more bandwidth had to pay more. At some point, a few web hosts began offering “unlimited” bandwidth plans.

Of course, no web hosts actually offered unlimited bandwidth. Hosts put restrictions in their terms of service agreements that made it possible to shut down websites that hogged server resources. If Google had tried to host its infrastructure on a $10 per month “unlimited” plan, it would have been shut down instantly.1

Even though most websites are tiny and have modest resource demands, people running tiny websites tend to like the idea of having an unlimited plan. Since the internet has way more tiny websites than medium-sized websites, web hosts could allow some unprofitable, medium-sized clients to stick around. The hosting bills for tiny websites essentially subsidized some more popular websites.

Over a few years, it became clear that offering “unlimited” plans was a winning business strategy. Gradually, unlimited plans became the industry standard. Fixed-bandwidth plans faded away.2

Back to cellular

Fixed-data cell phone plans are fading in the U.S. market. Take a look at the websites of any of the Big 3 networks. Which plans do you see? Unlimited plans get the attention. Fixed-data plans still exist, but they’re buried.

It didn’t used to be this way. The move towards unlimited plans has been rapid and will probably continue until unlimited plans dominate the market. Unless regulatory bodies step in, I see only two ways this can play out in the long run. Both scenarios seem bad:

  • Unlimited plans without many restrictions become standard. Light data users essentially subsidize heavy data users.
  • “Unlimited” plans with significant restrictions become standard. We get a race to the bottom.

Racing to the bottom

When fixed-data plans dominated the market, customers were aware of the limitations they were likely to run into. Hell, plans were their limitations. A 5GB plan might have been named “The 5GB Plan”.

As unlimited plans have risen, limitations have been hidden from customers and tucked away in the fine print of legal documents. Plan names turned meaningless: “T-Mobile Magenta” and “Verizon Above Unlimited.”

Carriers place limits on their “unlimited” plans so they can compete on costs. Have you noticed the policies below on the rise?

  • Video throttling
  • Hotspot data throttled to slower speeds than regular data
  • Monthly hotspot allotments that have no relation to overall data allotments
  • Data transfer that’s restricted to sluggish speeds after subscribers use a certain amount of data

For network operators, it’s not important whether a gigabyte of data is used streaming video, loading web pages, or running a hotspot.3 All these policies have the same purpose: reducing subscribers’ data use.

Low-priority data is another common limitation thrown on plans. Subscribers with low-priority data will experience normal speeds when a network isn’t congested, but their speeds will turn sluggish when things get busy.

Limits aren’t the problem

I’m not broadly against limits. I’m against limits that confuse consumers. I’m against limits that aren’t explained clearly and prominently.

Unfortunately, unlimited plans attract the kinds of limits I oppose. At some level, it makes sense, at least from a business perspective. If a carrier downplays how serious the limits are on one of its plans, the plan will be more appealing to consumers.

Carriers throttling heavy data users to 128Kbps don’t make candid disclosures. Imagine what that would look like:

After 35GB per month of data use, download speeds will decrease to frustratingly slow speeds (around 128Kbps). You probably won’t want to use the internet at these speeds unless you really need to. But if you have to load a boarding pass or an email after you’re out of regular data, you should be able to with a bit of patience!

No. We get vague disclosures like:

Data speeds reduce after 35GB but data is unlimited.4

Plans with low-priority data will have fine print mentioning reduced speeds during congestion, but details will be sparse. Customers trying to figure out how common congestion is, where congestion tends to occur, or how much speeds are slowed aren’t going to find the information they’re looking for.

Hell, it’s not just regular consumers that get confused and misled. My favorite tech review site can’t sort out prioritization policies. Here’s a bit from Wirecutter:

A T-Mobile spokesperson confirmed that policy, saying that although postpaid and prepaid T-Mobile service have the same priority, Metro by T-Mobile and other resellers ‘may notice slower speeds in times of network congestion’…However, AT&T and Verizon told us that they don’t impose any such prioritization.

Perhaps the scariest part of the excerpt is not that Wirecutter is wrong, but that people speaking for AT&T and Verizon were wrong about their own companies’ policies.

Where will we end up?

If nothing changes, we’ll continue to see the low-cost side of the market (a) throw more limitations on plans and (b) bury limitations deeper. In my view, the problem isn’t evil carriers. It’s bad incentives. Maybe the FCC or the NAD (National Advertising Division) will jump in and change carriers’ incentives. I’m not too optimistic, though.

Mint Mobile’s Unlimited Plan Has Limits

Today, Mint Mobile launched an “unlimited” plan. Mint has officially joined the ranks of carriers like Google Fi, Altice, Total Wireless, Wing, Tello. What do all these carriers have in common? Each offers an allegedly “unlimited” plan that strictly limits how much data subscribers can use.

The rest of this post is a rant. To be clear, I think Mint’s new plan is great. I just hate seeing the cellular industry move towards a scenario where every carrier has to offer plans that are misleadingly labeled “unlimited” in order to remain competitive. If you’re looking for a level-headed overview of Mint’s new plan, see my previous post. If you’re looking for cynicism and entertainment, keep reading.

Limits

Mint’s unlimited plan has three major restrictions:

  • Subscribers can only use 35GB of full-speed data each month. After 35GB of data use, Mint throttles data to sluggish speeds.
  • Mint limits mobile hotspot use to 5GB per month.
  • Mint throttles video streaming to a maximum of 480p.

How slow are speeds after 35GB?

Mint screwed up its communications about the throttling it imposes after 35GB of data use. Pre-launch information I received said subscribers would be throttled to 128Kbps. The only specific speed I’ve found mentioned on Mint’s updated website is 64Kbps:

Mint Mobile’s ‘Unlimited Data’ plan comes with 35GB of high-speed data, which is slowed to 64 kbps thereafter and reset at the next billing cycle.

I expect Mint will clarify its policies by the end of the day. For the rest of this post, I’ll give Mint the benefit of the doubt and say the throttle is 128Kbps. In some sense, it doesn’t matter if the throttle is 128Kbps or 64Kbps. The internet will be almost unusable at either speed.

Objections

But Chris! Mint lets you use unlimited data at 128Kbps! Sure, 128Kbps is slow as hell, but the plan is still unlimited!

No. At 128Kbps, a lot of things won’t work. Video won’t stream. Some web pages won’t load at all.

More importantly, a rate limit can’t coexist with unlimited data. If a full 128 kilobits is transferred every second for an entire month, only 41GB of data is used.1 There’s an absolute cap on Mint’s unlimited plan on data use of about 76GB (35GB + 41GB). Realistically, almost no subscribers will get much past 35GB of use in a month, since the internet will be so frustrating to use after the 35GB of full-speed data runs out.

But Chris! 35GB is practically unlimited! Almost everyone uses way less data than that!
Agreed! If you’re excited about the plan, this post probably shouldn’t dissuade you.

I don’t even fault Mint for calling the new plan “unlimited.” I’m impressed Mint managed to hold out so long while its competitors offered unlimited-but-not-really-unlimited plans.

My point is that consumers would be better off in the long run if carriers weren’t incentivized to mislabel plans.

Anyhow, if you’re interested in Mint’s new plan, go for it. It’s an awesome deal for $30 per month. Just realize it’s a 35GB plan.

Verizon’s 5G Mobile Hotspot & Tethering Policies

Verizon’s higher-end unlimited plans come with monthly allotments of full-speed 4G hotspot data.

  • Play More Unlimited – 15GB
  • Do More Unlimited – 15GB
  • Get More Unlimited – 30GB

Subscribers that burn through all of their full-speed 4G data can continue to use more hotspot data with a 4G connection throttled to a sluggish 600Kbps speed.

Verizon doesn’t prominently advertise it, but the company has separate policies for 5G hotspot data. Here’s a bit from a section of Verizon’s website that gives additional details about one of the carrier’s unlimited plans:1

Unlimited 5G Ultra Wideband Mobile Hotspot

An unlimited 5G Ultra Wideband mobile hotspot means your smartphone becomes an ultra-fast and reliable Wi-Fi connection for your other devices. Service available in select locations and requires a 5G capable device.

Yesterday, I was exploring my Verizon online account for the Play More Unlimited plan and found this:

Screenshot of Verizon account interface showing a 5G hotspot allotment

Verizon is currently allowing 50GB of full-speed 5G hotspot use each month on the Play More plan. After 50GB of use, speeds are throttled to 3Mbps. While 3Mbps isn’t a great speed for hotspot use, it’s still fast enough that most people could browse the internet and do work on a laptop without overwhelming frustration.

I’m guessing the Do More and Get More plans have the same 50GB allotment, but I’m not sure. It’s odd that Verizon’s 5G hotspot allotment on the Play More plan is so much larger than the regular (4G) allotment.

I wonder if the large allotment is a promotional thing. Will we see the allotment shrink as more subscribers get 5G-compatible phones?

Mint Mobile Extends Unlimited Data Again

Mint Mobile has extended its COVID-19-related unlimited data offer. Subscribers that joined Mint prior to April 14 can continue to receive data add-ons in 3GB increments at no charge.

Mint first said this offer would be available from mid-March through mid-April, but ended up extending the offer through mid-May. The company has now extended the offer for another month.

Image showing that Mint's unlimited data offer has been extended

I don’t know if we’ll see further extensions of the offer. More information can be found on Mint’s website.

Reviewing Altice Mobile’s “Unlimited” Policies and Pricing

Alice Mobile recently increased its prices by $10 per month. Service now costs $30 each month for Optimum or Suddenlink customers and $40 per month for everyone else.

In September, I argued that Altice Mobile was doing a lousy job of disclosing the limitations that came with the carrier’s supposedly “unlimited” plan. Given the recent price increase, I figured now would be a good time to revisit Altice Mobile’s policies.

Limits continue

Altice is still imposing a lot of limits on its “unlimited” plan:1

  • Mobile hotspot speeds are still throttled to 600Kbps.
  • Video is still throttled to about 480p.
  • Roaming data is still throttled to 128Kbps.

Previously, video and hotspot traffic would be throttled more intensely after 50GB of use. It looks like Altice has decreased that threshold to 20GB.

“Unlimited Everything” continues

Altice continues to advertise “unlimited everything.” Here’s a screenshot from Altice’s website today:

Altice Mobile screenshot

As before, it’s misleading for Altice to suggest subscribers can stream an unlimited amount of video or use an unlimited amount of mobile hotspot data. After 20GB of use, subscribers will be throttled to a maximum speed of 128Kbps for video and hotspot traffic. At 128Kbps, continuous streaming of conventional video won’t be possible.2 Many activities subscribers will want to do over a hotspot connection will be frustratingly sluggish if not impossible.3

Improved disclosures

To Altice’s credit, it looks like the carrier is doing a bit better disclosing limitations. With a single click, website visitors can view additional information:

Altice’s Broadband Disclosure Information seems easier to find than it was previously. While the disclosures still fall short of being explicit or easy-to-understand, Altice is moving in the right direction.

Infinity symbol

Tello Launches “Unlimited Everything” Plan

Today, Tello launched its “unlimited everything” plan for $39 per month. I’m frustrated by how Tello named its new plan. I say that as a fan of the company; Tello has some of the best options on the market for budget-sensitive consumers who don’t use a lot of data.

If subscribers on Tello’s unlimited everything plan use 25GB of data in a billing period, they will be throttled to sluggish, 2G speeds. As I’ve previously argued, unlimited plans at 2G speeds are bogus. Once the throttle kicks in, subscribers will find that data is unusable or barely usable for many purposes. While I’ve argued that many so-called “unlimited” plans are misnamed, Tello seems to have doubled down on its misnomer. Both “unlimited” and “everything” do a poor job of describing Tello’s new plan.

When carriers throttle data to 2G speeds, that usually means speeds are capped at 128Kbps. Imposing a maximum speed of 128Kbps puts a theoretical limit on total data use of about 65GB per month.1 In practice, few subscribers will use more than 26GB per month because the internet will be sluggish and frustrating use after the 25GB threshold is reached.

To Tello’s credit, the company does an unusually good job of disclosing the throttle. Here’s an example from the banner on Tello’s homepage this morning:

Tello Homepage Banner

US Mobile’s New Unlimited Plans – Well-Priced With Some Limits & Hidden Fees

The carrier US Mobile recently released new unlimited plans. As with US Mobile’s old plans, customers can choose either the Super LTE network or the GSM LTE network. Super LTE runs over Verizon’s network while GSM LTE runs over T-Mobile’s network. Plans appear to be priced the same regardless of the network a subscriber chooses.1

“Unlimited” is a bit of a misnomer for US Mobile’s new plans. The plans have limits, but the limits are dependent on which options subscribers select. Customers can choose either US Mobile’s “Fast” plan or its “Ludicrous” plan.

Limits

As I understand them, here are the limits on the Fast plan (base price of $40 per month):

  • Speeds are usually throttled to a maximum of 5Mbps
  • If 50GB of data is used in a single month, speeds are throttled intensely (15GB with GSM)
  • Hotspot use is not permitted (can be added for an additional $5 per month)

The Ludicrous plan has a base price of $50 per month. The Ludicrous plan does not have a 5Mbps throttle, and mobile hotspot is included. As with the Fast plan, data use beyond 50GB (15GB with GSM) is throttled intensely.

I use the phrase “throttled intensely” because US Mobile doesn’t disclose its policies clearly. On its website, the company writes:

Super LTE plans come with 50GB of high-speed data. A tiny fraction of heavier data users may notice reduced speeds afterwards.
While I appreciate the disclosure, I think there’s a lot wrong with it. While I interpreted it as indicating that speeds would be throttled intensely, a Reddit user thought the disclosure implied US Mobile customers normally would have high priority during congestion but would receive low priority after 50GB of data use.

A US Mobile agent I reached out to confirmed that there is a throttle after the threshold level of data use is reached. The agent seemed reluctant to mention a specific speed cap but explained that speeds would feel like 2G. Following the argument I made in Unlimited Plans At 2G Speeds Are Bogus, I think it would be more transparent if US Mobile called their plan a 50GB plan. Extra data at slow speeds could just be a little perk. That said, I understand the carrier caving to the pressure to call its plans “unlimited”.

I don’t love the phrasing of “A tiny fraction of heavier data users may notice reduced speeds.” It seems to suggest that only some of the people who pass the threshold will have reduced speeds. As I understand it, US Mobile is imposing a serious speed cap on everyone who passes the threshold of 50GB. I’d suggest an alternate phrasing along the lines of Heavy data users, who make up a tiny fraction of our subscriber base, will experience substantially reduced speeds after 50GB of use..”

Are The Plans Competitive?

US Mobile’s Super LTE unlimited plans look competitively priced for those who only need one or two lines and want service over Verizon’s network. Large families can probably get better per-line rates by purchasing service from Verizon directly (Verizon drops its per-line rates on unlimited plans as more lines are added).

Unlimited plans purchased from Verizon’s Flanker brand, Visible, may be cheaper than US Mobile’s plans, but regular issues and limited device options with Visible may make US Mobile a better bet.

US Mobile also includes some other companies’ services as perks with their unlimited plans. Here’s a screenshot from the carrier’s website:

List of US Mobile Perks

Hidden Fees

On the new unlimited plans, it seems US Mobile is still hiding fees. Most consumers won’t see these fees until after they’ve ordered a SIM card:

US Mobile's hidden fees

Both fees are annoying. One could argue the regulatory recovery fee is at least a fee that many other carriers are also hiding. The $2 per month service fee is unusual.

Xfinity Mobile’s Pricing vs. The Competition

5/17/2020 update: Xfinity’s 1GB plan that was $12 per month at the time this post was written is now $15 per month.

One of my recent posts about Xfinity Mobile received a comment on Reddit that got me thinking:

While Xfinity does have decent options (especially if you don’t need too much data) – it isn’t necessarily very different from other MVNO’s.

Let’s dive into that. It’s not always possible to make apples-to-apples comparisons among carriers since each carrier has its own way of structuring plans. Still, I’ll try my best to compare Xfinity Mobile’s prices to the best deals available from Verizon and other carriers that use Verizon’s network.

Low data use

Both the commenter and I think Xfinity Mobile may be a good option for people who don’t use a lot of data. For a base price of $12 per line, Xfinity Mobile offers a 5-line plan with unlimited minutes, unlimited texts, and 10GB of shared data. In comparison, a postpaid Verizon plan with 8GB of shared data, unlimited minutes, and unlimited talk would have a base price of $34 per line. It’s harder to make a close comparison with Verizon’s prepaid plans. 5 lines with 1GB of data each, unlimited talk, and unlimited text would have a base price of $30 per line. For 6GB of data on each line, the cost would be $32 per line.

If we look at individual plans rather than family plans, Xfinity Mobile still looks like a winner, but the competition is tighter. 2GB of data, unlimited talk, and unlimited text has a base price of only $24 per month with Xfinity. Verizon prepaid charges a base price of $30 for a plan with only 1GB. Verizon postpaid is a whole lot more expensive for a comparable plan. However, some Verizon MVNOs have similar prices. BOOM! offers 2GB of data, unlimited talk, and unlimited texts for under $30 per month. Total Wireless offers 5GB of data for a base price of about $33. Red Pocket offers 3GB of data for about $30.

Heavy data use

For heavy data use, Xfinity Mobile subscribers will probably want to turn to the carrier’s unlimited plans. These plans have a base price of $45 per line each month. At this point, Xfinity Mobile is no longer a clear winner, especially on family plans. With 5 lines on Verizon’s postpaid Start Unlimited plan, there is a base price of $30 per month. However, a single start unlimited line has a base price of $70, still a much higher rate than Xfinity charges. Visible, a flanker brand run by Verizon, offers unlimited plans for only $40 per month. Verizon MVNO Total Wireless has excellent prices on high-data allotment family plans. For example, 4 lines with 100GB of shared data come with a base price of about $24 per line.

Takeaway

Xfinity Mobile has extremely competitive prices for those who want service over Verizon’s network, don’t use a lot of data, and don’t mind being more tightly tied to other Xfinity services. For those who use moderate or large amounts of data (especially on family plans) Xfinity Mobile faces plenty of competition.

Accountant calculating

Xfinity Mobile’s Pricing Strategy

Comcast’s cellular brand, Xfinity Mobile, appears awfully well priced. Somehow, Xfinity Mobile offers service over Verizon’s extensive network without the usual price tag. You can check Xfinity Mobile’s coverage at your location with the carrier’s coverage tool.

Unlimited minutes and texts are included for free in all of Xfinity Mobile’s plans. Subscribers just pay for data, and rates for data are reasonable. For $45 per month, a subscriber can get unlimited data. Alternatively, subscribers can purchase a set amount of data and share it among up to five lines:

  • 1GB data – $12 per month
  • 3GB data – $30 per month
  • 10GB data – $60 per month

A family could get five lines of service with 10GB of shared data, unlimited minutes, and unlimited texts for a base price of only $12 per line.1 Purchasing a comparable family plan from Verizon would be far more expensive. Even other mobile virtual network operators (MVNOs) that run over Verizon’s network charge far more for similar plans. Why is Xfinity Mobile so cheap?

(Added 5/17/2020: In the time since this post was published, Xfinity Mobile changed the 1GB option from $12 to $15 per month.)

Lock-in with other Xfinity services

Only customers with active Xfinity internet service are eligible to sign up for Xfinity Mobile. Some people who would have used internet service providers other than Xfinity may now choose Xfinity internet so that they can sign up for Xfinity Mobile. Similarly, potential fees incentivize Xfinity Mobile customers not to cancel other Xfinity services:2

$20 per line monthly charge applies if at least one of the following post-pay subscriptions are not maintained on the account: Xfinity TV, Internet or Voice service.

Competitors threaten Comcast. Like Comcast, Verizon’s Fios offers bundled TV, internet, and home phone service. Emerging technologies like 5G fixed wireless may create viable alternatives to conventional cable companies. By bundling several services together, Xfinity may make it more difficult for consumers to switch to competitors’ services.

Favorable MVNO terms

Xfinity Mobile is relatively new, but it already has a huge number of subscribers.3 While the agreements between MVNOs like Xfinity Mobile and host operators like Verizon are generally private, my impression is that MVNOs with large subscriber bases often receive substantially better rates than MVNOs with small subscriber bases. Xfinity Mobile may, in part, be able to offer low prices because it gets unusually good rates on access to Verizon’s network.

Future prices

While Xfinity Mobile’s service is well-priced today, it’s not guaranteed to stay that way forever. We’ve already seen one revamp in Xfinity Mobile’s price structure.

Other explanations

I haven’t seen Comcast executives explicitly explain their rationale for launching a mobile service, so all I can do is speculate. If you have other thoughts about Xfinity Mobile’s pricing strategy, please leave a comment!

Consumer Cellular Increases Data Limits

Yesterday, Consumer Cellular announced an increase in the data allotments it offers at different price points. The table below outlines the changes:

Monthly data costPrevious allotmentNew allotmentPercent increase
$50.25GB0.5GB100%
$102GB3GB50%
$205GB10GB100%
$3010GB16GB60%
$4020GB25GB25%

I spoke with a Consumer Cellular support agent who confirmed that these changes would automatically affect existing customers. For example, a customer who was paying $10 per month for 2GB of data will now be allotted 3GB of data per month at no extra charge.

It’s great to see a carrier improving customers’ plans without charging more or requiring customers to proactively opt-in to the changes. In some ways, it’s a bold business move. Customers who were paying $30 per month for 10GB could now downgrade to the $20 per month price tier and still receive 10GB of data. That said, I don’t expect a lot of customers will actually downgrade in response to the new pricing structure.