Unlimited data and 5G will call for innovative new plans: CCS

Verizon recently rejoined the unlimited bandwagon
Verizon announced its unlimited data offering in February, after the other three major U.S. carriers all offered similar plans.

The reemergence of unlimited data plans in the U.S. and Europe will require carriers to come up with innovative new price plans as they enter the 5G era, CCS Insight said.

The rush to deploy all-you-can-eat data plans underscores operators’ confidence in their networks, CCS observed, and new technologies and networking strategies promise to help carriers maximize both the speed and the capacity of LTE. The new unlimited plans aren’t truly unlimited, however—all U.S. carriers can slow data speeds under certain conditions—and those limitations will increasingly come into play as operators approach gigabit LTE speeds.

“Download speeds beyond 100 Mbps will mean little to customers, and will struggle to transform their usage, if not coupled with flexible plans that enable them to access the service without fear of penalty if they exceed their data allowance,” CCS wrote in a research note. “'Unlimited' cannot mean the same for all users or all devices and objects connected to a network. Carries [sic] should instead consider how data plans work for specific users and in the context of the devices and services they connect.”

The market research firm cited the Finnish market, where unlimited plans are truly unlimited—including tethering—but consumption is based on various speed tiers rather than flat usage caps. The model enables operators to market LTE services for home broadband use, according to CCS, resulting in higher per capita mobile data consumption.

Carriers could also consider offering a wider variety of data plans, with a premium, unlimited plan on the high end and a much smaller offering at a much cheaper price. That would enable them to upsell customers to bigger data packages rather than slowing connection speeds.

“The steps toward ‘unlimited’ seen in recent months are a reassuring sign of progress in support of considerable current and future improvement in network and model capability,” CCS wrote. “Today the term carries various meanings and in this context it is very likely to become meaningless in the future. Network operators should instead think about how data plans work for specific users and in terms of the devices and services they connect. Plans that scale and adapt easily without penalizing users will off the best foundation for the shift to 5G. No one needs truly unlimited data. What people need are plans that are suited, and that seamlessly adapt, to their usage.”