Network, cost matter more to users than unlimited: Jefferies

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Jefferies found that unlimited isn't a top priority for most users when choosing a carrier

Network performance and monthly costs are far more important to U.S customers than unlimited data, according to fresh data from Jefferies.

Unlimited data has become a crucial factor for network operators as growth has stalled, ratcheting up competition. Sprint and T-Mobile both introduced all-you-can-eat plans for all customers last August, and Verizon and AT&T followed suit earlier this year.

A Jefferies survey of more than 1,000 postpaid subscribers found that the new plans are gaining traction, particularly among customers of the two smaller carriers. Roughly 62% of Sprint users are now on its unlimited offering, and 57% of T-Mobile users pay for unlimited. AT&T’s penetration rate for unlimited is 31%, and Verizon’s is 23%.

About one-third of all U.S. subscribers are on an unlimited plan, Jefferies reported, and nearly half of those on tiered plans expressed interest in moving to unlimited. But only 8% of those polled said unlimited was the most important factor when deciding on a wireless provider.

More than 46% of respondents said network performance and reliability was their top concern, and nearly 30% cited monthly cost as the No. 1 variable.

“While unlimited appears to be an important factor for consumers when deciding what carrier to choose, it places a distant third behind both network quality and monthly cost overall,” Mike McCormack of Jefferies wrote. “Among the carriers unlimited was most valued the most by Sprint (~28%), followed by T-Mobile (~20%), while only 13% and 5% of AT&T and Verizon customers, respectively, chose unlimited as the most important factor in the carrier selection process.

“While some may argue that network quality is converging across carriers, responses clearly do not indicate that to be the case,” McCormack continued. “Specifically, Sprint and T-Mobile customers value cost the highest, compared to network quality for both AT&T and Verizon. In fact, respondents using Sprint placed unlimited ahead of network quality, perhaps a sign of recognition that Sprint’s network still has a lot of ground to make up.”

Indeed, Sprint’s network was found to be the slowest among the major U.S. providers, according to the latest study from PCMag.com, while Verizon once again was determined to operate the fastest wireless network in the United States.

Jefferies’ survey is surely encouraging to Verizon, then, which has long positioned its network as the fastest, biggest and most reliable in America. Whether Verizon can continue to leverage that position in an increasingly unlimited world, though, is unclear.