After Verizon Communications Inc. announced that it was stopping unlimited plans for the iPhone, a batch of stories and blog entries appeared telling us that unlimited is dead. After all, Chief Financial Officer Fran Shammo was quoted as saying that unlimited data plans, such as the $30 per month plan that Verizon had offered to iPhone subscribers, are “not a long-term solution.”
The data crunch is certainly very real and service providers must deal with it. But like spring flowers that reappear every year after brutal winter rains, I don’t believe that we’ve seen the last of unlimited data plans.
It was only a few short years ago that service providers were happy to sign up consumers for unlimited plans as a way to monetize a new and exciting service. But it didn’t take long for the data crunch to hit hard, and since then analysts have been busy planning unlimited’s funeral.
Probably because of these continuous reports, many of the participants at our Amdocs InTouch Business Forum in Miami last month seemed quite surprised to hear that some service providers plan to continue offering unlimited plans. Sprint will continue to support unlimited data plans, for example. MetroPCS also said at InTouch that it will continue to offer its unlimited data packages ($40 a month, for unlimited voice, text and mobile Internet; $50 for a metered bucket of video minutes or $60 a month for unlimited video).
Why are some operators choosing to continue offering unlimited packages? The answer is simple. Actually, the answer is simplicity. Sprint said it will continue to support unlimited data plans because they help maintain customer satisfaction: there are no “surprises” when the monthly bill arrives.
And make no mistake about it, there will always be customers, particularly older ones, who will find it difficult to understand the technological aspect of their plans and will fear “bill shock.” Other customers may find it difficult to remember their limits in today’s busy world. The Guardian newspaper reported last year that a consumer group in Britain “found that 6 million people either did not know or had only a vague idea of their monthly limit for call minutes. Five million were unsure of their text and data allowances.”
Unlimited certainly isn’t for every service provider and it isn’t for every customer. As the crunch worsens, we can expect the desire for simplicity to grow and there will be ways to achieve simplicity for customers while factoring in the data crunch. Stay tuned…
* Special thanks to Eric Danis for his editorial assistance with this blog entry.