Impact on Phone Carriers of Unlimited Plans

30 Aug

The price competition among wireless phone service providers has certainly benefited consumers. But the extensive marketing of unlimited usage plans — at the same time that prices have been dropping — is impacting on network speed for Verizon and AT&T customers.
 
Rayna Hollander describes it thusly for Business Insider:

Verizon’s and AT&T’s reactive moves to expand unlimited data plans may be stifling their network speeds, according to T-Mobile CTO Neville Ray. A nosedive in megabits per second (Mbps) for the two companies during Q2 2017, coinciding with the launch of their new unlimited offerings, could suggest that the two networks were strained by the sudden uptick in data consumption.”

“It was only after the first full quarter since offering an unlimited plan that Verizon plummeted to third place, behind AT&T on network speed. Meanwhile, T-Mobile’s network ranks first in download speed and LTE availability in the U.S., Ray said, referring to Ookla data. In Q2 2017, the carrier reached average speeds of 27 Mbps. The success of T-Mobile’s strategy signifies how smaller companies can fly past competitors and swiftly disrupt markets, specifically the U.S. carrier model.”

“As smartphone and tablet adoption in the U.S. approaches saturation, carriers have begun fighting over the same subscriber base. T-Mobile’s disruptive, yet appealing, unlimited offerings have continued to eat into the customer base of rival carriers Verizon and AT&T. In Q1 2017, T-Mobile added 1.1 million customers, and Verizon had a net decline of 307,000 wireless postpaid connections.”

 

 

2 Responses to “Impact on Phone Carriers of Unlimited Plans”

  1. Harminder Pathania September 10, 2017 at 12:05 pm #

    The decisions to expand unlimited data plans by AT&T and Verizon has surely and inevitably led to the rise in customers for their rival T-Mobile (most significantly), and a greater net loss of their own. Despite being larger companies than that of T-Mobile, both Verizon and AT&T have lost customers due to their decisions to counter their rivals, ironically. Sprint is also on the rise according to this bar graph, likewise due to Verizon and AT&T’s decisions. T-Mobile has also increased in speed and LTE availability contributing to the rise in their customers.

  2. Jessica Keller September 14, 2017 at 4:19 pm #

    I believe that T-Mobile has made the most out of the losses of their competitors, especially with AT&T and Verizon’s new choices for data speeds. As a user of AT&T, they have made some quite harmful decisions for their users. It used to be that if you went over your data amount, you could just pay to get more. But instead, they now are not allowing people to pay for more, they are just slowing down your current speed. Although their unlimited plans are so expensive, that it may be easier to just go to a not as popular carrier, like T-mobile for a better price.

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