Under The Hood Of Unlimited Plans; Could It Drive iPhone-Like Data Adoption?


With Sprint (NYSE: S) Nextel unveiling its unlimited wireless plan today, all four of the major U.S. wireless carriers have released comparative offerings, giving us a chance to step back, take it all in and see how it may impact the business. So far, most have said that the offerings will have limited impact to their bottom line. If that’s the case, what could the potential outcome be?

Taking a closer look, perhaps the change will not come from people talking more, but from people using more data. Almost all of the carriers — with the major exception of AT&T (NYSE: T) — are including some data in the unlimited plans. We have seen what including can data can do to behavior. With the iPhone, which packages together voice and data in one plan, data usage soared: Google (NSDQ: GOOG) said iPhone users searched 50 times more than users of any other handset and Deutsche Telekom (NYSE: DT) said iPhone customers use about 100 MB, or 30 times more than average.

For Sprint, which is including more data services in the plan than any other carrier, this is definitely the motivation. “For us, this is much more than a new rate plan. This is an invitation to our current customers and to our new customers to explore the full wireless world of data services and to do so on the nation’s largest mobile broadband network,” said CEO Dan Hesse during Sprint’s earnings call today. “For us, this is the beginning of a new era in wireless. Speed matters, but it’s also about simplicity and usability.”

So, here’s a list of the new offerings. This time focus on the data features included in the packages, and forget about the unlimited calls. I’ve also included the financial impact the carriers have predicted, where available, to show that this might not be about making money, but about changing consumer behavior. As the plans are adopted by consumers, we could also see carriers experiment and add new features.

Sprint Nextel: Perhaps the biggest example of this, the Overland Park company launched today an unlimited pricing plan that includes unlimited voice, data, text, e-mail, Web-surfing, Sprint TV, Sprint Music, GPS Navigation, Direct Connect and Group Connect for $99.99 a month. For $89.99 a month, there will be an unlimited voice, push-to-talk and text option. On financial impact, Hesse said they are balancing fiscal responsibility and growing the wireless data market.

T-Mobile USA: Announced on Feb. 19 that it will offer a plan that includes unlimited voice, and unlimited text, picture and IM messaging for $99.99 a month.

AT&T: Announced an unlimited voice plan for $99.99 a month on Feb. 19. Separately, AT&T customers can sign up for data plans such as $5 for 200 text, picture, video and instant messages or $35 for unlimited messaging and MEdia Net access. AT&T said it still expects 2008 revenue growth in the mid-single digit percentage range despite offering the unlimited calling plan, and said a very small percentage of its customers spend more than $100 a month.

Verizon (NYSE: VZ) Wireless: Announced an unlimited voice plan for $99.99 a month. An unlimited plan including messaging is $120 a month, and a plan including messaging, VCAST, VZNavigator and Mobile Email is $140 a month. Verizon said currently about 305,000 customers, or 0.5 percent of its subscriber base, have monthly plans above $99. Those customers have an average monthly bill between $125 and $135 a month. Over time, the reduced revenues from higher value customers moving down to the unlimited plan should be offset by increased revenues as a result of customers moving to unlimited plans, Verizon said.

Others: A variety of smaller carriers are also pushing for a variety of unlimited voice and data plans. Helio offers an unlimited voice plan for $99 a month including unlimited text, picture and video messaging, unlimited data, Web, and GPS-enabled Google maps, among other functions; Leap’s Cricket offers unlimited anytime minutes and long distance including free text and picture messaging, unlimited 411 and unlimited Web access for $50 a month; and Sprint Nextel’s Boost Mobile offers unlimited calling including text and picture messages, and Web access for $65 a month when in your home calling area.

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