AT&T announced on Monday that it’s offering customers on its Unlimited Elite plan an even better deal: unlimited high-speed data without the penalty of slower speeds if customers go over their monthly allotment.
It’s also a way of saying they’re not going to throttle or cap high-speed data for customers who are paying for the higher-end, $85/month plans. But that’s typically not how carriers describe it. Rather, they’re saying folks aren’t going to get “slowed down,” which, in some ways, sounds slightly better.
AT&T explained that its current Elite customers don’t need to lift a finger to take advantage of the new plan. Elite customers will receive a text notifying them of the new benefit when it’s added. Plus, AT&T is increasing the mobile hotspot data to 40 GB, which is 10 GBs more at no additional cost to the customer. HBO Max already comes included, and customers can watch it in 4K UHD resolution where available.
T-Mobile quickly reminded everybody that it started this unlimited trend back in February, when it launched its Magenta Max plan, which at the time was described as the kind of plan where “you can’t be slowed down based on how much you use.” T-Mobile added that the plan is made for video streaming, with ultra-high definition (UHD) streaming up to 4K resolution and Netflix on Us on all Max plans.
“The Un-carrier drives the competition to be better for customers, and while it's been a long time since AT&T tried to keep up, it only took them four months to follow our lead with a Magenta MAX knock-off,” said Jon Freier, EVP, T-Mobile Consumer Markets, in a statement after AT&T’s news on Monday. “Too bad AT&T customers will still have to use AT&T's network. It's like we said, a strong T-Mobile is GREAT for customers. Now, when will Verizon, Comcast, Charter decide to step up?"
T-Mobile has been taking advantage of its 2.5 GHz spectrum in more ways than one. The spectrum, which it acquired through the merger with Sprint in 2020, gives the carrier a lot more capacity and allows it to boast the “highest-capacity 5G network available,” eliminating “speed bumps” for customers.
RELATED: T-Mobile’s new MAX plan showcases 2.5 GHz
While it’s generally considered “throttling” when carriers slow down users in order to manage traffic on their networks, carriers usually don’t embrace that term. Back in February, T-Mobile’s chief marketing officer at the time, Matt Staneff, said he wouldn’t necessarily use the word “throttling.”
They prefer to call it network prioritization management, which is used to keep the network safe under stress. With the 5G era, “we’ve got a lot of capacity,” he said, and it doesn’t have to be as worried about managing the network traffic like it did in the past.
In the 3G era, a lot of the biggest users were called “data hogs” – a small percentage of subscribers who consumed more than what was considered their fair share of network capacity. Therefore, carriers felt justified in throttling back their usage when they hit a certain threshold in order to make sure there was enough capacity for everybody.
Nowadays, 5G is more data efficient than previous generations, and since T-Mobile has been “running away with net adds for umpteen quarters,” it makes sense that AT&T would react with a plan affecting the highest ARPU segment, said Bill Ho, principal of 556 Ventures.
Verizon remains hold-out
How fast Verizon reacts depends in part on how well it’s meeting its internal goals. Verizon reports second-quarter results on July 21; AT&T reports on July 22.
“It remains to be seen” how fast Verizon reacts because the marketing plan will depend on its network preparedness, and it’s partly spectrum constrained until its C-band spectrum gets deployed, Ho said.
Verizon is the No. 1 carrier in postpaid, and it doesn't want to do anything that's going to disrupt customers. “Prudently, they want to make sure that it passes muster within the network usage and operations so they don’t have it blow up and have people leave because of that. It’s a tenuous situation for them,” Ho said.
That said, “I think it may even be a moot point once they get that C-band up and working,” he added, noting that the whole point is protecting the high-APRU customer with the speedier data plans.
It’s worth noting that even with increased video usage over the past year or so, there’s only so much data that most people need.
“Consumers are over-buying on these unlimited plans,” with only a low single digit percentage of customers using more than 22 GB a month, said Roger Entner, analyst and founder of Recon Analytics.
Article updated with additional analyst comment.