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Unlimited Plans Could Create Unlimited Trouble

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Will consumer adoption of unlimited mobile plans cause your call quality to suck? ABI Research seems to think so. In a report released today, ABI Research says unlimited plans can lead to more phone calls, more data use and worst of all, more YouTube-related video streaming. And that leads to more of a burden on wireless networks and backhaul. Since Sprint’s unlimited plan includes 3G data as well as voice, it may be the canary in the coal mine for other carriers waiting to see what unlimited means for their networks.

13 Responses to “Unlimited Plans Could Create Unlimited Trouble”

  1. I am surprised no one has mentioned 4g technology. Granted, it will be a year or so before we see heavy 4g integration on any network, Sprint being the front runner, 4g is supposed to incorporate VOIP Technology that will increase bandwidth to the point that tower capacity issues will be a thing of the past. Just because people are using the services more does not mean there will not be any network growth. On the contrary, the unlimited plans will drive competition to the level that we should plan to see exponential growth in prices and technology, so that customers will be able to use the services as much as they want, not as much as they are limited. In no way could this have a long term negative effect on the industry. Were we really worried about losing bandwidth when dial up ISP’s went unlimited? (It might even be said that
    Sprint CEO Dan Hesse is responsible for the quick release of the unlimited plans. What a lot of people don’t realize is that Sprint has been testing an unlimited plan in select markets for a couple of years. Sprint had posted on their site for 1 day that they were going unlimited until posted, then pulled it from their website so that Engadget had to post a retraction. 1 Week later all of the major carriers launched an unlimited plan, which Sprint conveniently undercut by including unlimited data and text.)

  2. tc1uscg

    Gee, didn’t see anyone jump and say that when VZ deployed FIOS, all that “extra” bandwidth would be sucked up by late night porn watchers, streaming video freaks or gammers hogging the system. Nope.. didn’t see a thing.. Didn’t see or hear of any issues when wireline providers started selling “unlimited” local/ld calling. If I was gigaom, I would go back to ABI and ask for a refund on the doom and gloom report they tried to pass off as fact.

  3. Sampath

    This is total BS. 3g networks are all running at 20-25% capacity (except in some high traffic areas like airports, etc). On the voice side its probably 70%. Unlimited will have some impact, but most of the adds has to be on the backhaul side and some “carriers” . The big issues here is backhaul esp since in the US its all T1 based and not very scalable..There are sites with 12+ T1s..Totally kills the cost base…

  4. Stacey Higginbotham

    Curtis, you are right, but what about the people who see $99 unlimited plan and have never really bothered with data before? I have no idea how many people would fall into that camp. I suppose we should also add the increase in smart phones to the calculation. That, more than unlimited plans will drive data use.

  5. Curtis Carmack

    Sprint’s data plans in fact can be much lower than $30. In many grandfathered plans it’s a free add on, or costs $10. Plans at this level have been available at least since 2002 when I first signed on for it. Based on Sprint’s ARPU, I think promotion of the $99 plan may actually increase ARPU, while not putting a lot of additional strain on the data network. I guess we’ll see over the next few quarters.

  6. Anonymous Coward

    Curtis’s comment is on point. Sprint has been offering unlimited data in plans starting at $30/mo for almost two years now. Just about anyone who could read a forum post could get one of these plans.

    The difference is that along with unlimited data, $99 now gets you unlimited voice instead of 2500 minutes, but since there are only ~15,500 minutes that could be billable in a month (fewer if you exempt mobile-to-mobile calls) I don’t think users will be able to abuse unlimited voice to the point where it collapses the network.

    If anything, Sprint should avoid a host of customer service calls related to billing that have been it’s achilles’ heel in the past.

  7. What they are saying about Sprint is now that they are giving away unlimited everything for 100 bux, more people are likely to go for that plan and due to that increase of overall usage, the network will get bogged down. Yes, they have unlimited plans now (as do most carriers) but didnt until recently have that for a low fee. Thus more people will join and cause in higher network usage thus causing an issue for everyone else. Think of it like cable DSL where the more people are on your node, the less speed and performance you get.

  8. Curtis Carmack

    The comment on Sprint does not make much sense. Almost all of Sprint’s data plans for phones have always been unlimited. I don’t see how rolling that into the voice package is going to lead to any usage beyond what Sprint sees now. Sprint’s data offering structure is so different from that of the other carriers that I don’t believe it will provide any insight at all for them. If anything, Sprint is likely to come off much better for the comparison. One man’s opinion (and I am most certainly NOT a Sprint fanboy) YMMV.