Juan Monroy

Last week, was a whirlwind week in the US wireless industry. Before then, only T-Mobile and Sprint offered unlimited data plans to all customers, but by the end of the week all four major carriers offered them. On Monday, Verizon announced that it was resurrecting its unlimited wireless plan, and a few days later, AT&T announced that it was also offering an unlimited wireless plan to all customers, whereas it was only available to DirecTV subscribers.

Although all four carriers offer 4G LTE data, there’s an implicit hierarchy among the wireless carriers in the United States. At the top, AT&T and Verizon have the most mature networks that cover the most terrain and carry the most expensive pricing. Below them is a second tier of carriers, namely T-Mobile and Sprint. Their networks cover less terrain and are perceived as being less robust in terms of network connectivity. Because of this perception, they have been the most aggressive about pricing. That is why they were, before last week, the only carriers to offer unlimited plans.

To be sure, the only reason Verizon’s and AT&T’s unlimited plans emerged last week was because of the competitive pressure that T-Mobile and Sprint have put on Verizon and AT&T. Verizon likely felt the squeeze was too much to bear and capitulated with its new unlimited plan. AT&T likely saw this and quickly reacted by expanding its unlimited plan to everyone. It’s safe to say that none of this would have happened had AT&T been allowed to acquire T-Mobile.

For readers who are carrier-agnostic and are considering switching to an unlimited plan, Mac Rumors has produced a nifty comparison between the four unlimited plans offered by the majors. But as the kids today say, YMMV.

Unlimited vs. Unlimited

I was immediately intrigued by these new offerings. I have been on the grandfathered unlimited data plan that AT&T once offered with iPhones. I have held on to it despite the introduction of less-expensive metered data plans and a $5-per-month rate increase instituted last year that was due to increase by another $5 next month. Another factor in my intrigue was that I have two other lines on my plan: one is on a metered 3 GB data plan (labelled below as “Line 2”) and the other (labelled “Line 3”) is on a grandfathered unlimited data plan. I also receive a 20% employee discount through my employer.

Here’s a comparison between my current talk, text, and data plan; my current talk, text, and data plan after the impending rate hike in March; and AT&T’s new unlimited plan. (All prices are rounded to the nearest dollar, and they do not include taxes and fees, which I am considering as a wash between all these plans.)

As you can see, the new unlimited plan for all three lines is about $10 less than the current talk, text, and data plan that I share with two other lines.

The savings are greater after factoring in the impending $5 per-month rate increase, effective March 2017, for each grandfathered unlimited data plan (Lines 1 and 3 in the table above). I guess AT&T’s strategy to bully us off the unlimited data plan finally worked!

Another factor to consider is that Line 2, the metered plan, often exceeds the 3 GB data allotment. AT&T bills the data overage at $10 per GB. I considered switching to a plan with more data, but the next higher offering is $50 for 5 GB. There is no “discount” for more data at this next plan; it’s similarly priced at $10 per GB, as is the base 3 GB and any associated overages. With Line 2 on an unlimited plan, there will be no more overage charges.

If I add a fourth line, it will, in effect, be free because AT&T reimburses you $40 each month for that fourth line, after a two–billing-cycle “waiting” period. That would significantly reduce the price per line.

But Why Stick with AT&T?

Although AT&T’s new unlimited plan is the most expensive of the four major wireless carriers and is the only one that doesn’t offer tethering, I prefer to stay with AT&T for three reasons:

1. I am receiving $650 in bill credits from AT&T for my iPhone 7. When Apple introduced the iPhone 7 last September, AT&T allowed you to trade-in your iPhone 6 for up to $650 in credit towards an iPhone 7. You could get effectively get a base model iPhone 7 for free. Since I opted for the 128 GB instead of the base 32 GB model, I am paying the extra $100 over 30 months, which works out to about $3.30 per month. Should I leave AT&T, I will have to pay the remaining balance, which is significant.
2. The AT&T wireless network is superior to the others where I live and work. Although it was hardly true a few years ago, AT&T has a very reliable wireless network in New York, particularly the neighborhoods I frequent. I considered switching to the more affordable plans on T-Mobile or Sprint, but after speaking to friends and colleagues, I resisted switching because those networks are not as reliable as AT&T’s. Moreover, Verizon had a potent 3G network that put AT&T’s to shame. In the 4G LTE era, the opposite is true. AT&T operates a robust network in New York that seems to outperform Verizon’s network, according to the testimony of my friends and colleagues.
3. Tethering is not a factor. The unlimited plan never allowed tethering so I am not going to miss what I don’t have.

What Should You Do?

An unlimited plan isn’t for everyone. Most mortals use a surprisingly small amount of data, less than 3GB per month, so an unlimited plan would be excessive for them. Personally, I wonder if that’s because most wireless users have conditioned themselves to restrict their data usage for fear of overages. For the majority of those users, I say stick with your metered plan.

But I use a lot of data, regularly between 3 GB and 6 GB, per month, as sometimes as high as 12 GB. I like not having to worry about overages. Also, Line 2 on my plan, the one with the 3 GB plan, would regularly exceed those allotments. I doubt he would be happy turning on “safe mode” to slow down the data transfers to 2G speeds. The unlimited plan works for us, but it might not be the best for you. As I literally said before, YMMV.

Conclusion

In the end, the small but measurable savings between the talk, text, and data plan of yore and the new unlimited plan made a lot of sense. But also, my wanting to stay loyal to AT&T played a significant factor. As much as we all hate the cable company, the airline, and the wireless carrier, AT&T has been just fine for me. I certainly suffered when the iPhone was exclusive to AT&T, as making a phone call or transmitting data seemingly never worked, but in the 4G LTE era, things are different. Of course, this might change when 5G emerges as a standard, but that is still a couple of years away. And if AT&T falters, I’ll be off-contract. I can always switch to another plan or provider.

Update: AT&T announced on Monday, February 27, that it is introducing two new unlimited plans. I’m mulling it over and will repost here about what I think to do.

Update 2: I switched to the new Unlimited Plus plan.