04:39 PM
Eric Zeman
Eric Zeman

Wireless Customers Want Unlimited Data: Study

A new report coming from research firm Sanford Bernstein shows that most smartphone users want to keep their unlimited data plans.

AT&T and Verizon Wireless have stirred up the ire of customers with their new, tiered data pricing models. Both companies introduced new data plans with drastically lower caps on the amount of data customers could use in a given month -- albeit at lower price points. The Sanford Bernstein study says that lower cost or not, people want unlimited data plans and will pay more for them.

Back in June, AT&T eliminated its $30 unlimited data plans for new customers. It replaced them with 2GB for $25 and 200MB for $15. This, says AT&T, has opened up its services to a new group of customers. Mark Siegel, AT&T spokesperson, told CNet in an interview, "We have found that our customers in fact like usage-based billing. They appreciate having choices in data plans. This is probably because a majority of customers can reduce their costs through our plans."

Thankfully, AT&T allows existing smartphone customers to keep their $30 unlimited plans when they upgrade to a new device. This is what I did.

Verizon Wireless followed suit. It is offering 150MB for $15 per month, but retained the $30 unlimited monthly data plan.

Craig Moffett, an equities analyst with Sanford Bernstein, wrote, "Unlimited data plans could become a major source of differentiation, attracting customers and giving still-unlimited carriers a subscribership boost. At the same time, however, carriers who maintain unlimited pricing in the face of AT&T's move to usage based pricing could self-select to the heaviest users, impairing future profitability."

What's interesting is that customers are willing to overpay for data. For example, many users don't surpass 200MB in data per month, which is why AT&T picked that data point. Even so, customers are willing to pay for far more data than they need for fear of exceeding their monthly limit and being hit with overage fees. Most people over-estimate how much data they use, and then overpay for it, despite the economics proving they could save money each month.

Moffett noted, "The new conventional wisdom is that carrier loyalty has been replaced with loyalty to the device. But high inclination to switch carriers and phones to maintain an unlimited plan suggest that perhaps the plan itself is more important than either one."

[Via CNet]

Comment  | 
Print  | 
More Insights
Oldest First  |  Newest First  |  Threaded View
InformationWeek Elite 100
InformationWeek Elite 100
Our data shows these innovators using digital technology in two key areas: providing better products and cutting costs. Almost half of them expect to introduce a new IT-led product this year, and 46% are using technology to make business processes more efficient.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends to Watch in Financial Services
IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of October 9, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll