Blog Post

The Hidden Cost of Unlimited Plans

To say that unlimited wireless plans lead to increased usage of voice minutes and data is obvious, our friends at Techdirt remind us. They argue that the real upside is “new applications and services that simply weren’t possible before,” much like how the move away from a “pay-per-hour solution” helped the Internet bloom. Good point! On the flip side, the wireless carriers are having to hustle to upgrade their backhaul infrastructure.

“What we’re seeing with the Simply Everything product from Sprint and with the rest of the industry is that the increase in unlimited data and voice plans exponentially increases the backhaul requirements of 2G and 3G networks,” Craig Cowden, Sprint’s vice president of cable/VoIP and access strategy, commented during a panel at CTIA Wireless 2008 in Las Vegas, Telecommunciations Magazine reports. As a result, the company is working on getting cable companies and Ethernet-over-copper service providers to switch away from the now archaic T-1 connections to higher speed pipes. In other words, for carriers — unlimited plans do come with a plan.

7 Responses to “The Hidden Cost of Unlimited Plans”

  1. During the late nineties, I was victimized by unlimited plan offered by the cellphone company service that I was using at that time. Since then, I refused to get unlimited plans and continued with prepaid. Since then, I never received a phone bill for $1000 that I supposedly made. I am baffled why FCC have not cracked down on this flagrant rip off and why millions of people still subject themselves to this obvious rip off.

  2. @ Random Thoughts,

    I think the biggest problem is that carriers cannot embrace their one true skill: being access providers. Instead of being good at one thing, they try and be good at everything, which is why people like you find ways to do things despite thm.

    Problem is not with the dumb pipe. Problem is with dumb executives who can’t make money from that dumb pipe. Look at Free.fr: for them being dumb brings in the Euros.

  3. Unlimited plans will lead to more services being avaialble, but will the carrier be able to benefit from those additional services?

    I text on my phone using my Verizon unlimited data plan, but I don’t use Verizon’s network, so they lose text revenue from me. What happens if I use VoIP? Do they lose cell revenue also?

    That is the problem with just being a dumb pipe.