Last year we saw AT&T eliminate it’s $29.99 unlimited data plan, and Verizon is now following in their footsteps. Both companies are allowing customers with existing unlimited plans to continue on as if nothing has changed. They are not doing this out of the kindness of their hearts, rather to avoid the flood of customers jumping ship due to a breach of contract. We are all aware of the pricey early termination fees you agree to pay when entering a 2-year contract with your cellular carrier. One of the few ways you can cut your contract short and avoid paying these fees is by cashing in on a little clause that states if changes are made to your original agreement, you can terminate your contract without being held responsible for the fees. Switching you from unlimited data to a metered rate plan would definitely qualify as a significant change to your terms. Disclaimer: please read your contracts carefully before calling your carrier and cancelling and getting hit with a huge bill.
The phone companies have one mission, and that is to maximize profits. When a mass change in data pricing occurs, you can bet your ass it is not to make the customers happy, but an effort to add to their profits. Phone companies offered unlimited data plans early on, when market penetration of smart phones was far smaller than it is today. Only a very small percentage of users were consuming enough bandwidth to be of concern. But everyone can see the upward trend in mobile data use.
Cisco published a whitepaper earlier this year that shows just how fast things are moving. The numbers are staggering! Below are just a few highlights.
Click here to read the full paper.
Global mobile data traffic grew 2.6-fold in 2010, nearly tripling for the third year in a row. The 2010 mobile data traffic growth rate was higher than anticipated. Last year’s forecast projected that the growth rate would be 149 percent. This year’s estimate is that global mobile data traffic grew 159 percent in 2010.Last year’s mobile data traffic was three times the size of the entire global Internet in 2000. Global mobile data traffic in 2010 (237 petabytes per month) was over three times greater than the total global Internet traffic in 2000 (75 petabytes per month).Mobile video traffic will exceed 50 percent for the first time in 2011. Mobile video traffic was 49.8 percent of total mobile data traffic at the end of 2010, and will account for 52.8 percent of traffic by the end of 2011.Mobile network connection speeds doubled in 2010. Globally, the average mobile network downstream speed in 2010 was 215 kilobits per second (kbps), up from 101 kbps in 2009. The average mobile network connection speed for smartphones in 2010 was 1040 kbps, up from 625 kbps in 2009.
The phone companies are reacting in two ways to this information. First, they are scrambling to eliminate unlimited data plans and get as many customers locked into tiered plans as possible. AT&T’s unlimited data plan has been unavailable for new customers for over a year, but some of their recent actions related to the tethering crackdown are obviously aimed at getting more people to drop their unlimited plans. They make it very clear than any once your plan is changed you can never switch back to unlimited again. As a way of strong-arming existing customers into switching, they decided to implement a tethering data plan. In order to get it, you are forced to drop unlimited from your plan. In my opinion, Verizon is handling things a little more diplomatically by allowing users to keep their unlimited data plans and pay an extra fee to add a tethering plan on top of it. Only the tethering portion of your data will be limited. I still don’t think it’s right to charge me extra to use my data in a different way, but it’s the lesser of 2 evils.
On the other hand, the phone companies are seeing dollar signs. AT&T has somewhere in the neighborhood of 70 million customers. Let’s say that 1/2 of 1 percent of them used a single 1gb unit of data over their plan limit. That would be around 350,000 people paying an extra $10 in a single month, bringing AT&T an additional $3,500,00 in one month! If the data use trend continues to rise, I can only imagine this percentage will continue to increase.
The cellular companies love to go on and on about their superior networks, increases in speed with the introduction of 4G to the market, phones with larger and larger screens, consuming more and more bandwidth with each generation. But what good is all of this when you will have to think twice about streaming a movie from Netflix while on the road in fear of a huge bill at the end of the month?
2 gigabytes (GB) of data sounds like a lot, and for many users it might be sufficient. But let’s break that data down to a daily rate. There are 1024 megabytes (MB) in a GB. 2048 MB over a 30 day month will break down to only just over 68MB per day. I have been using my Slacker Radio app this morning while typing this article and so far I have used right around 95MB. I would guess that I have been listening for 1 1/2 hours maximum. Let’s say the average is 60MB per hour. This means you can stream 1 hour of music a day and have a little bit left over for a few emails and some web browsing before you hit your limit. 1 hour of streaming radio in a day does not sound like a lot to me at all. In the days of strict corporate firewalls, my only source of music in the office is my phone. I can easily exceed my data limit for the day before I finish my morning coffee.
AT&T provides a data calculator in order to estimate your monthly usage. http://www.att.com/standalone/data-calculator/
By their estimation, streaming 1 hour of music per day would only use 0.86GB in a month. That works out to under 30MB per hour. Admittedly, I have chosen to use the “Maximize Audio Quality” option in Slacker Radio which will increase the bandwidth required. If I was using a metered data plan, I would be forced to think twice about using options like this. One of the reasons I prefer Slacker Radio to Pandora is because I believe the audio quality is higher. I do not want to compromise my listening experience because I’m worried about my monthly data use cap.
I recently installed a Cydia app called iNetUsage which allows me to monitor the data consumption of individual apps. It’s only 10:30AM and today I have used 122MB of data, broken down as follows:
Beware of extreme data usage
I wanted to see just how much data Netflix streaming used, so I watched a single 22 minute long episode of Family Guy, but Netflix was not showing any bandwidth being used. The small amount of data you see is just from browsing my instant queue. The creators if iNetUsage have stated that there are some limitation and that activity from certain applications cannot be recorded. According to AT&T’s calculator, streaming 22 minutes of video per day would use 1.26GB of data, which breaks down to a little over 40MB per day. So, in reality, my 122MB used for the day should be closer to 160MB. If I averaged this for the entire month, I would be approaching 5GB at the end of my billing cycle. For someone on the 2gb plan, you would need to shell out an extra $20 in overage charges, and you will be pretty close to the $30 threshold of 5GB.
I just don’t understand how this type of usage is considered above and beyond the norm. Why offer streaming radio apps, and brag about how amazing the Netflix streaming app is, when you are penalized for taking advantage of these services?
The more I monitor my data usage, the more I realize how quickly this data can add up.
I just loaded up Google Maps and after less than 10 minutes I had managed to use over 22MB of data.
A single speed test using the speedtest.net app = 6.5MB.
Launching the NY Times app, loading today’s headlines and reading 2 stories consumed 4.26MB.
Viewing my twitter feed from this morning used up over 10MB.
Checking on Facebook, another 2MB.
If you add everything up, even with absolutely no streaming radio use, my data for today would have been well over 50MB out of my daily allotment of 68MB. And it’s only 2:30 in the afternoon.
If every day of the month looked like this for me it would show in my past data usage, which it does not. I have only exceeded 2GB and handful of times and it wasn’t until I became a heavier user of Slacker Radio that my average has shot up closer to 3GB in a month. While I might be in the top tier of data users today, but the trend is obvious. A few more years and 2GB will not be enough, even for the casual user. But I don’t know how to predict how the phone companies will respond. Will people continue to pay for more and more bandwidth and increasing prices? Or will consumers eventually be pushed to their limits forcing a change in the way they use their mobile devices?
For those of you without unlimited data, one of your only remaining options is to make the switch to Verizon. But you better do it quick, because July 7th is the planned cutoff date. Sprint still has what the call an “unlimited” plan, but it is well known that the limit is actually 5GB. Virgin mobile handle limiting their “unlimited” data plan in a different way. Their cap is also 5GB, but instead of charging you extra if you exceed this limit, they limit the speed of your connection for the remainder of the billing cycle. T Mobile uses the same strategy along with a sneaky ad campaign where they try to sell you an “unlimited” 4g data plan for only $50 a month. The catch is your speed will be limited after the first 100mb! 100mb at 4g speeds can literally be consumed in a matter of seconds. The term “unlimited” needs to be regulated somehow, because it’s thrown around gratuitously by the phone companies when none of them offer a truly unlimited option.
For the time being, I will continue taking full advantage of my unlimited data plan. But who knows how long that will last. There may come a day when AT&T just cuts us all off because they know that there is no viable alternative. Until that day, I expect my average monthly data use to continue to follow an upward trend.
