Unlimited Data Plans in the U.S. Mobile Communications Market

May 19, 2017

There are several reasons why Frost & Sullivan believes that unlimited (UNL) plans – or plans with large data allowances – were introduced and are here to stay. Three broad areas will drive this market dynamic: 1) Competitive Environment, 2) Consumer Data Consumption Habits, and 3) Improved Network Efficiency. An analysis of these 3 factors is below.

  1. Competitive Environment – Porting ratios are a critical dynamic in the saturated US mobile communications market. With increased competition, every service provider now offers UNL or UNL-type-of plans. This has been the trend with other services as well. For example, if an operator introduces unlimited music or unlimited video, others tend to introduce similar services within a month or two. If an operator starts to pay the early termination fee for competitors’ customers, others do the same.
  2. Increased Data Consumption – Average monthly data consumption continues to aggressively increase. With network upgrades and the introduction of more advanced devices, average monthly data consumption increases significantly. Frost & Sullivan observed a significant rise in average monthly data consumption when LTE was introduced, and that will only continue with 5G. However, consumers are not going to pay a whole lot more to use data. In order to support the trend of higher data consumption and to ensure that consumers can do so at sustainable price points, UNL makes sense. Mobile operators could decide to throttle (or lower the connection speed) for consumers that use higher amounts of data.
  3. Network Efficiency – By introducing more efficient wireless technologies (improved modulation, network densification, etc.), mobile operators can lower the cost per bit which means that they can also support lower revenue per bit. However, it is also true that UNL eliminates overage charges that make up a good portion of mobile data revenue for mobile operators. At the same time, consumers are inclined to pay higher account fee by adding on more devices to their mobile plans, which helps to offset the loss of overage revenue.

Tier-I mobile operators are adding millions of customers on UNL plans every quarter. Given the current market conditions it would not be wise to eliminate UNL. However, the detailed terms/structure of these plans can always be modified to address evolving market conditions.  


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Vikrant Gandhi

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Fourteen years of product marketing, research, and consulting expertise, which includes supporting clients’ needs through more than 140 syndicated market research deliverables and consulting assignments. Particular expertise in Assessing next-generation telecommunications trends, technologies and market dynamics; Helping clients develop and execute their go-to-market strategies; Providing continuous inputs to clients into new market developments and helping them understand the strategic implications.


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