When the public was walking around with flip phones carriers were all too happy to offer unlimited data plans because there simply wasn’t a whole lot out there worth downloading at the time. Since then, image uploads, video file sizes, streaming sites like Netflix and mobile gaming options have exploded into a new ecosystem of activities that are thirsty for massive amounts of bandwidth, and carriers are trying to secure their slice of the pie with specific data plan caps and cost increases across the board.
Many AT&T customers have stubbornly hung onto a grandfathered unlimited-data plan that the company stopped offering to new customers more than five years ago. Now the nation’s second largest wireless carrier confirmed on Monday that it is raising the price of that unlimited-data plan by $5 to a new price of $35 per month. This is the first price change on that plan in seven years and will take effect in February. Even more significantly, nearly every phone upgrade option or plan change comes with a requirement to agree to a new two year contract that obviates the unlimited data provision – making it harder and harder for grandfathered customers to continue clinging to their favorite mobile service offer.
Verizon raised the price of its grandfathered unlimited-data plan by $20.00 earlier this month. T-Mobile and Sprint claim to offer unlimited data but each has raised their prices in the last few months and T-Mobile quietly throttles video clarity to reduce data usage.
The carriers all claim that these price increases reflect the higher cost of delivering data to customers, but the larger more important aspect of the story is that carriers are being cornered into serving as ‘dumb pipes’ that only offer pure bandwidth with little or zero other value being added. Coverage is becoming ubiquitous among all carriers in most metropolitan areas, apps and third party services are circumventing any native software they might provide and handset manufacturers have already taken over the hardware end of the market. With little left to sell beyond bandwidth, it comes as no surprise that these companies are now doing their best to turn data transfer itself into a higher priced commodity.