Most people like the sound of "unlimited," and when a carrier tells us that we have unlimited minutes, text messages or Internet use, this sounds great. However, to the best of my knowledge there are no truly unlimited cell plans as they all have caveats or small prints of some sort, including the new T-Mobile ONE plan. This promises customers unlimited calling, texting and data for $70 a month when it's introduced in early September. From a customer's perspective, this seems something of a steal as the current 6 GB plan is $65. For the cost of a coffee date over and above this plan, customers benefit from unlimited data up from a capped allowance of 6 GB. This sounds too good to be true… and as T-Mobile's competitors are keen to point out, it is. However, there are caveats to consider here. But on the subject of an unlimited plan being too good to be true, cellular networks only have a certain capacity and bandwidth and not all customers have the same usage patterns. As there are more and more ways to use Internet on our smartphones, so the carrier industry has moved from simply offering an internet bundle (typically offering unlimited data) through to capped allowances, and now back towards offering the one generic "internet bundle."
T-Mobile's $70 unlimited plan is not truly unlimited because it is subject to a fair use allowance. According to T-Mobile, this is around 26 GB or a little under 1 GB of mobile data per day. When customers reach this amount of data used, T-Mobile reserve the right to throttle a customer's data connection speed. However, the system that T-Mobile use is described as being somewhat smarter than this. In common with other carriers around the world, T-Mobile's throttle technology has the ability to prioritize other customers' data demands ahead of high usage customers. This means that in a busy city at high demand, a throttled customer may only see relatively slow data throughput whereas at four o'clock in the morning in a quiet rural town, it may not make any impact on data transfer speeds. However, calling T-Mobile's ONE plan "unlimited" sounds much better than "you might be capped at 26 GB," right?
Some carriers avoid the term "unlimited" and instead use an alternative, such as "always on" (the UK's giffgaff), "all you can eat," (the UK's Three) whereas other carriers specifically state that the line comes with a given allowance, which once exceeded, results in data speeds being slowed (many carriers, but AT&T's recent change to remove overage charges uses this model, as does giffgaff's "always on" bundle) or stopped. A line with 3 GB of high speed data, then unlimited data but at 2G speeds is technically unlimited, but depending on how the 3 GB is used the customer may find the reduction in speed very obvious. A 2G connection should be good enough for navigation purposes and browsing Accelerated Mobile Pages, but customers can forget about watching YouTube video clips.
There are many reasons why carriers restrict customer data use. One is cost, because that bandwidth needs to be bought and maintained. The other is fairness for all customers: talk to carriers and they will tell you that is is a small minority who typically use a significant amount of data and if left unchecked, this can ruin the experience for other users. In the case of T-Mobile, they state that they expect around 3% of customers to have their data speeds throttled. This implies that for 97% of customers, they can use their device as much as they want during a month and because their use is under 26 GB in total, their plan gives them effectively unlimited data. For the customer who typically uses over 26 GB a month, T-Mobile's ONE plan may not be all that it's hyped up to be. Again, calling it the "97% Unlimited" plan doesn't sound as catchy.
As with all products and services, it is important for the customer to check the caveat and small print to make sure he or she knows what they are getting into. Taking a look through the new T-Mobile ONE plan, it comes with unlimited SD video streaming, that is, data used via this service is not considered part of the 26 GB allowance. It also means that these videos won't take advantage of a modern smartphone's HD display. For higher quality video streaming, customers must pay another $25 a month. For the keen smartphone video viewer, this could be money well spent but for many customers, it's unnecessary. And whilst the ONE plan includes tethering, this is capped to 2G speeds – it's fine for checking email on the move from say a tablet but for anything heavier duty, customers will need to pay $15 for 5 GB of full speed tethering from the smartphone.
T-Mobile's ONE is designed to cover most people's needs with one simple, relatively inexpensive monthly plan. It will not cover all potential customers, but it has already shaken up America's fourth largest carrier, Sprint, enough such that they released their own improved plan on the same day. T-Mobile should be applauded for simplifying their core offering as much as possible though and at a time when elsewhere in the world, other carriers are seemingly doing the opposite.