AT & T announced last week that it was doing away with its unlimited data plans in lieu of cheaper entry points for data. The move was widely perceived to improve network quality and will most likely be the first of many similar announcements by other cellphone carriers. Smart Phones can use up to 7 times more data than conventional cell phones which places a great deal of stress on a network. If you have ever been in a large urban center down the eastern seaboard of the U.S., you will understand first-hand the effects of lots of Smart Phone usage during peak hours; call dropping is a regular occurrence.
For those who invest in telecommunication company stocks, it is difficult to tell what the effects will be. Unlimited data plans are revenue capping while a move to lower entry points on data may entice a new group of customers but with potentially lower margins- call it a passive aggressive race to the bottom. One also wonders if AT & T is pursuing greater quantity of customers, it ends up in the exact same place now- lots of customers overloading the network.
Mobilicity and Wind, 2 of the 3 new cellphone companies in Canada, have unlimited data plan but at more expensive rates than AT & T’s former plan (par for the course for all Canadian cellphone carriers who are at least a year behind the U.S. which, in turn, is behind Europe/Asia).
But, given the trending the U.S., it appears unlimited data is neither profitable in the long run or helps network reliability. If you have unlimited data plans in Canada and use it to the max, it may be another 12-24 months before the ride is over.
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