Why unlimited data is stupid (and customers don’t want it)

Written by on June 1, 2017 in Opinion with 1 Comment

Wireless carriers in the US are in a race to the bottom. Analyst Chetan Sharma says that with the onslaught of unlimited data plans, the revenue from data went into reverse for the first time in over a decade.

What is sad about this is that customers do not even want unlimited data plans, according to a new survey commissioned by MATRIXX Software. The survey reveals that 58% of customers would change their plan today if they could get more control and more choice over their services. Offering unlimited data also devalues it. Customers would prefer to decide what to do with unused data, rather than leave it, uneaten, on the side of their plate. They should, they say, be allowed to roll it over, give it to charity or be compensated in some way.

Some would change their plan once a month, even once a day if it helped them get more choice, control and flexibility. Some would just like to pay for the data they consume. As Dave Labuda, CEO and Founder of MATRIXX says, “consumer preferences are trending towards individualization, where the customer can choose products and services they most want at the time and location they most need”.

It is, according to Labuda – and we have to agree – a very different environment than it was 10 years ago.

Many might remember MCI, the first disruptive, maverick carrier to compete with AT&T. Comedians in the industry believed that MCI stood for ‘More Change Imminent’ and MCI went the way of all things, by being too willing to take risks. In those days there was another wave of unlimited plans, the only difference was that it was about voice. MCI did some research that proved that if you offer customers all the voice they could possibly want for $40 a month, the vast majority would never reach that limit. So, it worked.

Now, though, the same is not true with data. With data, the more you give, the more customers consume.

Thus the misguided race to the bottom and the self fulfilling prophecy that data has no value.

The situation is reminiscent of EasyJet, the ‘low cost’ airline in Europe. They launched as low cost, everyone had to scramble for uncomfortable seats and had to pay extortionate sums for their food. When the rattled incumbents had followed them to the bottom (actually they are still going) then EasyJet did an about turn and started offering ‘premium’ services, allocated seating, extra leg room and other things that we took for granted, but which now look like luxury. The incumbents have been caught out.

So it seems with US carriers and their data. T-Mobile is the EasyJet of this game, and having disrupted everything by being the UnCarrier, now has its sights set on becoming the best –the number one carrier – in the US.

The question is whether the trend towards personalisation, as highlighted by the MATRIXX commissioned survey, will influence their next choice of direction. Time, and not much of it, will tell.

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Alex Leslie

About the Author

About the Author:

Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews.

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  1. Alan says:

    Hi Alex, the survey is BS. If customers didn’t want ‘unlimited’ plans they wouldn’t buy them.
    What nebulous personalization are you referring to? Seriously, that is a self-serving survey if ever I’d seen one!
    Customers want value for money FULL STOP!
    The big US mobile telcos made a rod for their own back with a pricing regime that fined people if they went into overage. Hence some customers decided to pay for ‘unlimited’ and avoid the unexpected fines at the end of the month.
    TMO is not the leader in ‘unlimited’ – many of the tier 2/3 US providers have been unlimited for $50 pm for years.
    Most fixed internet access providers have been ‘unlimited’ for decades. Mobile is finally catching up with the fixed. The current mobile ‘unlimited’ pricing regime isn’t going to change anytime soon (just like fixed). Only the Ts&Cs will change to limit abuse.
    Bottom line – its all about the services!

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