U.S. Mobile Carriers Move to "Virtual Unlimited Usage" Plans

Though many do not appear to trust the long-term operation of competitive markets to bring value for consumers, that appears to be happening in the U.S., Indian and other markets.

Consider the matter of value, as represented by the cost of using mobile data. Over the past decade, for example, some “consumer advocates” and app providers have pilloried usage-based billing and usage caps.

Internet service providers generally have favored usage caps and metered usage plans (generally in the form of buckets of usage), though there has been a difference between market share leaders and attackers.

Now, with the growing importance of video entertainment apps and services, all the major mobile operators in the U.S. market are moving to a targeted form of “unlimited” usage, exempting video apps from usage charges. Since it is video that will be driving most of the usage increases for the the foreseeable future, that is a de facto shift in thinking to relatively-unlimited usage plans.

In the Indian market, the entry of Reliance Jio into the mobile market--with generous “free” mobile data allowances,  is prompting other competitors to lower prices and increase usage allotments, especially at the “top” of the market (4G services).

source: Cisco

Marketing practices can, and seemingly always do, evolve over time. But the importance of mobile video consumption as a revenue source, as a preferred consumer activity and as a perceived marketing advantage are leading mobile ISPs to shift towards pricing policies that effectively represent “unlimited” usage of the most-important app driving data consumption.

As with earlier packages offering such generous usage allocations they were virtually unlimited (a big usage bucket a customer never exceeds is effectively the same as an unlimited plan), mobile ISPs have shifted towards nearly-unlimited usage plans.

That, one might argue, is essential if the video entertainment business shifts from linear to on-demand, and from fixed network consumption to mobile consumption. Today’s video entertainment business would not work if consumers had to pay both for content and then also for capacity. Broadcast TV and radio, cable TV, telco TV, satellite TV, Netflix, Amazon Prime and other content businesses generally are zero rated in terms of bandwidth usage.