Now that we’re living in an all-unlimited world, the challenge for operators will be how to differentiate themselves from the competition in a brutal wireless market. And innovation will be crucial.
AT&T yesterday became the last U.S. carrier to fully join the unlimited-data battle when it made the plan it launched last year available to any user, not just those who subscribe to DirecTV. The plan starts at $100 a month for the first line and $40 a month for each additional line. A fourth line is free, so an account with four lines costs $180 a month after two initial months at $220 each.
As CNET pointed out, that price is roughly in line with Verizon’s plan, which starts at $80 a month for a single line and tops out at $180 a month for four lines. T-Mobile’s unlimited plan is slightly cheaper, starting at $70 a month for the first line and $160 a month for four lines.
Meanwhile, Sprint continues to undercut the competition, recently knocking $10 a month off the price of its unlimited plan for users who switch to bring it down to $50 for one line and $90 a month for four lines.
Closing in on network parity
The unlimited feeding frenzy comes as the three smallest major carriers continue to close the network gap with Verizon, as fresh data from OpenSignal showed. Verizon’s average LTE download speed was 16.89 Mbps in a recent OpenSignal study, essentially tying T-Mobile’s performance of 16.65 Mbps. Verizon’s LTE network was available 88.17% of the time, topping its rivals, but Sprint’s network—which was once a massive vulnerability—was available a respectable 76.81% of the time.
So while Sprint’s network is still no match for Verizon’s, it’s good enough that the carrier continues to grab market share from the nation’s two largest operators.
“Since our last U.S. report, all four national operators saw not insignificant improvements in our 4G availability metrics, but the biggest improvement we measured was on Sprint’s LTE network,” OpenSignal said. “Sprint’s 4G availability jumped from 69.9% in August to 76.8%. Sprint, however, is still last among the four national operators in our availability rankings, but it’s now much closer to bridging the once-yawning chasm between itself and the other three.”
Meanwhile, sales of mobile phones in North America and Western Europe are “closed to saturation” and will peak this year before scaling back, CCS Insight said recently. That means carriers increasingly have to fight to poach customers from their competitors rather than simply get fat while the overall market sees rapid growth.
Expanding beyond traditional wireless… but to where?
As carriers race to the bottom in the war over unlimited, then, they’re increasingly pressured to look beyond their established business models to find new ways to make money. AT&T is the most obvious example here, launching its DirecTV Now service late last year and pursuing an acquisition of Time Warner in what would be a blockbuster—and very risky—deal.
Verizon is expanding into media too, but in a much more deliberate manner built on businesses like AOL, Millennial Media and Go90.
It isn’t at all clear that expanding into media is the key for wireless carriers, though. Verizon continues to struggle to gain traction with Go90, of course, and DirecTV Now seems to be attracting customers but doesn’t come close to generating the profit margins traditional video businesses do. In the era of OTT video, it probably isn’t sufficient for carriers to differentiate their offerings simply by marrying video and wireless service.
That’s why I was so intrigued this week to hear T-Mobile executives discuss why the traditional video business is ripe for disruption. T-Mobile has reshaped the landscape of the U.S. wireless market in recent years, launching multiple initiatives that forced its rivals to follow suit, and the company is clearly considering applying that tactic to video.