There’s no question that the launch of unlimited-data plans by Verizon and AT&T has resulted in slower network speeds for some of their subscribers. The questions are why, and why that matters.
T-Mobile CTO Neville Ray was quick to pounce on a report from Ookla in July that illustrated the data speeds of the nation’s two largest carriers had slowed in recent months, saying their LTE networks had “caved” due to increased traffic spurred by unlimited plans while T-Mobile’s speeds had improved.
Ookla’s data was mirrored by an OpenSignal report issued in August that determined T-Mobile operated the fastest network in the United States during the second quarter of the year, while the speeds of both Verizon and AT&T had slowed. And while Verizon executives insisted its network was performing well in the unlimited era, the carrier raised eyebrows in August when it overhauled its unlimited plan in what appeared to be a clear indication that capacity had become a concern.
“Verizon’s latest change to their unlimited offering (in which they can throttle users at any time) suggests that they don’t have as much headroom as they might have previously expected,” New Street Research observed in a September research note.
Throttling, which carriers like to refer to as "deprioritization," enables operators to slow data speeds under certain conditions for subscribers once they've reached specific usage thresholds. Under Verizon's overhauled plans, for instance, the operator can slow speeds during times of network congestion for users who have surpassed 22 GB of data in a billing cycle.
Is throttling playing a role?
Ookla suggested that deprioritization policies may be to blame for the slower speeds in its tests, however.
“Whether these carriers are deprioritizing customers or customers are flocking to slower, more budget-friendly plans, both AT&T and Verizon are seeing an increase of customers experiencing speeds less than 5 Mbps,” Ookla wrote, noting that some people “have argued that these networks may be saturated. However, if they were, we’d expect to see the number of tests at every level of speed decrease. Our data does not bear this out and it seems likely we’re seeing reduced performance due to high usage deprioritization and consumer plan choice.”
Deprioritization affects a tiny fraction of subscribers, though, so it’s unlikely that it plays a significant role in the slowed network speeds of Verizon and AT&T, Roger Entner of Recon Analytics said. But even if capacity constraints are a speed bump for customers, the differences between LTE speeds of the three largest carriers are likely to be unnoticed by virtually any subscriber.
“The big question is when these tests are happening, does it really matter?” Entner asked rhetorically. “Is there a meaningful difference in your user experience if your network runs at 20 (Mbps) or 30 (Mbps)? I doubt it.”
Every carrier is employing a variety of different strategies and technologies to increase capacity on their networks. Some are acquiring more spectrum, and they're using technologies such as carrier aggregation, higher-order MIMO and even LTE-U and LAA (which conducts transmissions in unlicensed spectrum) to meet ever-increasing demand for data.
Meanwhile, other factors are likely at play in the data from Ookla and OpenSignal as well. While T-Mobile has focused intently on urban areas over the last few years, Verizon still claims the nation’s largest network footprint, so speeds in some rural areas may drag down its results. Also, it’s worth noting that both network-measurement firms use crowdsourced data gleaned from their apps—and users are much more likely to launch those apps when their connections are either sluggish or abnormally fast, Entner noted.
Network speeds as a key differentiator
Regardless, third-party network tests have long been a key marketing metric for carriers, even if end users may not notice a difference in data speeds from one operator to the next. So in the era of unlimited LTE data, carriers increasingly find themselves walking a fine line between throttling speeds to keep network congestion to a minimum on one hand and delivering data as quickly as possible on the other. Operators that slow data transmissions too drastically risk having their networks outperformed by the competition, which rivals would surely use as a key differentiator in TV ads and other high-profile campaigns.
“It really matters in marketing,” Entner said of network test results. “It’s one of the few ways of how you can quantify your quote-unquote superiority in a way laypeople can understand. … Rightly you have to say faster is better. It’s just consistent logic.” — Colin | @colin_gibbs