Do Unlimited Plans Change Customer Data Usage?

In the U.S. market, as all four of the largest U.S. mobile operators now offer, and are marketing, some form of “unlimited” usage plans (even if there are actual limits in place), we ought to be alert to potential changes in usage patterns.

It simply stands to reason that a customer moving from a fixed-usage plan of some sort to an “unlimited” plan might be inclined to consume more data, especially if that customer previously had purchased relatively smaller usage buckets.

It also stands to reason that this might not actually occur for at least some customer segments who previously had been on “big” usage plans. In other words, a customer on a data plan with lots of permitted usage (a “big bucket of usage”) might not necessarily increase usage in a material way, when converting to an unlimited plan.

Indeed, that is what analysts at BCG argue: “Unlimited plans do not increase usage; they shift usage to cellular,” BCG says.

Asking the question of whether subscribers on unlimited plans actually use more data than those on capped plans, BCG finds the  answer is “no.”

Perhaps surprisingly,  “overall usage is roughly the same.” So for at least some customer segments, mobile operators can benefit. They can offer plans that offer “more,” but might confidently predict that many consumers--though pleased that they now can buy plans that offer more usage--might not actually change their behavior.

In that case, the mobile operator is able to offer “more value,” arguably creating a happier customer, but without fear that at least some key customer segments will actually increase usage in any significant way. So the mobile operator can offer higher value, but without the cost of actual increases in usage that eventually drive up capital spending to supply additional network capacity.

Or maybe not. “What unlimited plans do appear to do, however, is steer more—significantly more—of that usage to the cellular network,” BCG also says.

The implication is that even if “unlimited plans” do not alter total data usage, they still affect ntwork load, because “customers on unlimited plans use twice as much cellular data as customers on limited plans.”

source: BCG

So, at least so far, widespread adoption of unlimited usage plans will change usage patterns, but not because actual usage increases.

Instead, there is a shift of usage from Wi-Fi to the mobile network, the opposite of the prior trend where consumers offloaded more of their usage to Wi-Fi, and off the mobile network.