2010 was a potentially difficult year for many smartphone customers who were becoming reliant on their device’s Internet connection, because this is the year that many carriers across the world shut down their unlimited plans. Some carriers, such as Telefonica’s O2 in the United Kingdom, simply converted their Internet plans from unlimited to a capped allowance, whereas other carriers would allow an existing unlimited plan to continue on (and these are now known as grandfathered plans) but new business was diverted into a capped allowance tariff – such as AT&T and Verizon Wireless. Since then, the carriers have invested millions if not billions into modern, high performance LTE networks and we are seeing the first tentative signs of a comeback of unlimited data plans. AT&T has recently announced some limited availability, but unlimited data, plans for customers who also subscribed their DirecTV or U-Verse TV services. However, in today’s earnings call, Verizon’s Chief Financial Officer, Fran Shammo, said about unlimited data plans: “At this point, we are not going to entertain unlimited.”
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The news does not come as a surprise for industry experts: many carriers around the world take a dim view of offering customers an unlimited data allowance, wary of a small minority of customers using a considerable amount of data and potentially disrupting other customers. There are many different ways that a network is able to identify those customers using a considerable amount of data, plus of course identifying what they are using it for. Similarily, there are many different techniques to control this behaviour including techniques such as throttling data speeds for some or all types of use. Some carriers reserve the right to throttle data speeds for certain customers performing certain tasks over their network even on a capped data plan.
Verizon Wireless are instead concentrating on their core offerings for customers and have no intention of engaging in a price war with the competition – AT&T, T-Mobile and Sprint – by offering a number of promotions to customers. Fran explained that the carrier would “remain disciplined” in the competitive environment. “Promotions come and go. We can’t react to everything in the marketplace.” We have already seen both AT&T and Verizon claiming that they are not interested in a competitive price war with Sprint and T-Mobile US, although AT&T’s special promotional unlimited data plans would appear to fly in the face of this original claim. We may yet see Verizon Wireless release an unlimited data plan.