Unlimited data wars heat up

AT&T, Sprint up the ante in suddenly cutthroat market

When it comes to wireless, one-upmanship never seems to stop. The latest to enter the ring: AT&T and Sprint.

The nation’s No. 2 and No. 4 carriers unveiled a clutch of new features designed to make their wireless data plans more attractive in a market that’s gone from competitive to cutthroat in less than a week.

For new customers, Sprint upped its week-old offer of five lines with unlimited data, for $90, to include high definition video streaming and 10GB of mobile hotspot data.

AT&T unbundled its unlimited data offering from requirements that customers also subscribe to its DirecTV or Uverse television service. AT&T is offering one line for $100, or four lines for $180.

The moves followed Sunday’s announcement by Verizon Wireless, the nation’s biggest carrier, that it would start offering unlimited data plans for $80 a month for one line and $180 for four.

Verizon’s return to unlimited plans wasn’t a huge surprise, given its projections of flat growth and aggressive marketing moves by the smaller, scrappier T-Mobile that has made it tougher to add subscribers.

Still, Verizon — which had last offered unlimited data in 2012 and counts 114.2 million subscribers — creates big waves when it makes it a turn.

Within a day, T-Mobile had polished its own offering, announcing that customers on its $70 unlimited T-MobileOne plan will get HD video and up to 10GB of high-speed “hotspot” data at no extra cost, taxes and fees included. Added promotion for a limited time: Two lines cost $100.

Analysts say something akin to a price war is in the works — great news for cellphone users shopping for the best deal and consumer advocates, who can point to this period to argue against a T-Mobile-Sprint merger, if such a tie-up transpired.

For investors, it’s a different story. T-Mobile shares are down nearly 3% since the Friday before Verizon’s rollout.

AT&T and Verizon are “finally realizing that there isn’t enough growth left in the phone market that we can afford to sit back and watch the other carriers come in and take our customers,” says Jan Dawson, chief analyst at the Jackdaw technology research firm.

Sprint’s deal, available starting Friday, also includes a free iPhone 7 for the next 18 months with a trade-in of certain older phones. Sprint will automatically upgrade customers who signed up for last week’s $90 offer to this latest deal, giving them HD video and mobile hotspot, though they won’t be getting the free iPhone 7.

AT&T’s latest plan matches Verizon’s new unlimited offering for four lines, though a single line is pricer than Verizon’s.

As with Verizon, AT&T will

be slowing down users when they are in busy or “congested” areas if they’ve already consumed more than 22GB in a month. The new unlimited offer will include HD video, but unlike the other carriers, it will not be allowing users to use their phones as a mobile hotspot. Verizon, T-Mobile and Sprint’s latest deals all include 10GB of mobile hotspot data.

AT&T last offered unlimited data to non-TV subscribers in 2010, with some customers still holding on to those older unlimited plans. AT&T says those users are not affected by Thursday’s announcement, though in March they will see a previously announced $5 increase that raises the price to $45.

There also is a $40 “access fee” on top of that, bringing the total price for those users to $85 per month, still $15 cheaper than a single line on AT&T’s new plan.

The return to unlimited poses financial risks for all the carriers, especially as wireless revenues are capped for the customers who opt into the latest plans.

“If it turns out people switch to unlimited and start binge-watching Netflix and Hulu on the way home from work and eating up lots of data, then that can have a significant impact on the network,” Dawson says. But “if people switch to unlimited just for peace of mind and don’t change consumption patterns all that much then it doesn’t have much of an impact at all financially.”

Dawson is already anticipating three months from now, when the carriers next report quarterly earnings: “It’s going to be one of the most unpredictable quarters in a long time in the U.S. wireless industry.”

The moves followed the announcement by Verizon that it would start offering unlimited data plans for $80 a month for one line and $180 for four.