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Smartphone data shake-up: The end of 'unlimited'

Unlimited data is only a memory for most smartphone users. What has the shift toward tiered plans really meant for our wallets?

February 8, 2012 06:00 AM ET

Computerworld - Americans like living large. We have all-you-can-eat buffets and all-you-can-stream entertainment. And until recently, we had a virtually unlimited trough of mobile data to digest on our always-available smartphones.

At this point, though, all but one of the major U.S. carriers now limit smartphone data usage in one way or another. AT&T and Verizon charge if you go over your allotted number of bytes, while T-Mobile slows your speed down to a crawl once you've crossed its carefully measured line. Only Sprint continues to offer truly unlimited data plans to new subscribers. (Some lucky users on the other networks are still grandfathered in to unlimited plans; we'll see how long that lasts.)

"This trend is happening all over the world," says Thomas Husson, a mobile analyst at Forrester Research. "Carriers need to monetize their core assets and avoid the risk of a few users saturating their networks."

As the era of limits on data usage enters its second year here in the U.S., it's worth taking a look at how tiered plans are really affecting smartphone users. Can we make it through an entire month with only 2GB of smartphone snacking, or should we spring for that beefier 5GB plan? How much mobile data do we really need, anyway? And what can we do to avoid that dreaded "data overage" line on our next cell phone bill?

Here are some answers.

Smartphone data plans: What we're paying

Let's start with the state of the U.S. smartphone data market. The prices vary a bit, but when you round to the nearest whole number, you're basically paying about a penny per megabyte on the major carriers' current monthly data plans.

On AT&T, you can get 3GB for $30 or 5GB for $50; on Verizon, it's 2GB for $30, 5GB for $50 or 10GB for $80. T-Mobile bundles its data into voice packages and doesn't provide breakout costs, but if you subtract the amount of the stand-alone voice plans, the data price comes out to $20 for 2GB, $30 for 5GB and $60 for 10GB.

The lower-end options, meanwhile, are more expensive by the byte: AT&T offers 300MB for $20, which comes out to about 7 cents per megabyte, while T-Mobile offers 200MB for $10 -- or about 5 cents per megabyte. Verizon doesn't have a lower-end plan for smartphones.

The phased-out unlimited data plans, in comparison, were typically $30 a month. On Sprint, the one carrier that does still offer an unlimited plan, unlimited data usage costs $30 but also carries a $10 surcharge, so you're essentially paying $40 for the all-you-can-use option.

Smartphone data plans and pricing

Carrier Data allowance Cost Overage fees
AT&T 250MB (tablets only) $14.99/mo $14.99/250MB
300MB (smartphones only) $20/mo. $20/300MB
3GB $30/mo. $10/1GB
5GB $50/mo. $10/1GB
Sprint Unlimited $40/mo. ($30 + $10 surcharge) N/A
T-Mobile* 200MB $10/mo. N/A
2GB $20/mo. N/A
5GB $40/mo. N/A
10GB $60/mo. N/A
Verizon Wireless 2GB $30/mo. $10/1GB
5GB $50/mo. $10/1GB
10GB $80/mo. $10/1GB
*Price estimated by subtracting price of stand-alone voice plans. T-Mobile's plans drops down to slower service when data limit is reached.
Source: Company websites

Beyond the basic numbers

So how much data are we actually using?

None of the major U.S. carriers was able to provide me with specifics about average usage on their networks or the percentage of customers subscribing to each data plan, but independent analyses can give us a pretty good picture of where things stand.



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