En Garde: The Battle for the Unlimited Cell Phone Plan

February 20, 2008

Verizon Wireless, AT&T Wireless, and T-Mobile recently waged a price war for unlimited use calling plans on their respective networks. The three cellular companies have unlimited calling plans starting at $99 a month. Verizon customers can upgrade to unlimited messaging an extra $20; that same customer can have unlimited messaging, email, and video to anywhere in the country for $40. AT&T’s customers can upgrade to unlimited data usage for $35 a month. T-Mobile left out any word of data plan add-ons. Sprint admitted they will not join the $99 unlimited calling plan bandwagon.

unlimited-calling-plan3.jpgPutting aside Sprint’s decision to remain uncompetitive, this move signals a positive development for the cellular telephone market. Wireless carriers are beginning to realize that as technologies converge, price plans for services should follow suit. People are tired with the nickel and dime-ing that has taken place over the last few years based on varying usage of multiple features. The piecemeal approach of charging per text, per email, per web launch forces the customer to think more about if the can say something rather than what they can say. Bravo to unlimited calling and data plans for the everyday users on everyday phones.

As much of an epiphany as this business model shift ends up being, it may be a lateral shift in terms of price for now. For example, prior to the announcement, Verizon had 1350 minutes for $99 with $45 added on for unlimited data (on a blackberry). Unlimited calling plans started at $119, totaling $165 for unlimited usage. Is a $25 price drop earth-shattering? Maybe not when the user is willing to spend well over a hundred dollars each month for the service in the first place.

Overall, this is good news for the consumer and for the cellular usage market. Cheaper access to broadband wireless could spur higher demand and faster innovation in wireless devices.