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What did they really accomplish with unlimited?

Posted by Joe P on February 22, 2008

So the week is about to close, and I’m hoping I don’t have to hear the word “unlimited” for quite a while. Though I know I will, since Sprint still hasn’t committed to anything. They will eventually one way or the other, but in the interim, I’m hoping to talk about things other than unlimited plans. Since we’re at the end of the week, though, I thought I’d completely exhaust the topic and discuss what the cell phone carriers really gained by introducing unlimited calling plans starting at $99. Please keep in mind that despite my reading a slew of telecommunications news, this is still an outsider’s opinion.

Verizon was the first out of the gate. Of course, that might not have been what AT&T had in mind. I talked to some Verizon employees, both corporate and independent retailers. No one knew this was coming. I actually heard one story of a corporate guy going into an independent retailer to get literature on the unlimited plans on Tuesday. Alas, there was nothing to be found.

This makes it appear like Verizon knew AT&T was going to make their announcement, but made sure to get the word out first. “Verizon’s offering unlimited calling! Let’s praise them!” So when AT&T made the announcement, there was less impact.

T-Mobie gained the most by this. By offering unlimited messaging with their $99 plan, they add extra value to their plan. If you’re going to switch to a carrier because of the unlimited plans, T-Mobile is the one to mop up. However, this speaks to the larger point.

Will anyone switch? The only major carrier without unlimited now is Sprint, and people were flocking away from them, anyway. But if you’re with T-Mobile, Verizon, or AT&T, you completely lack a reason to switch. So while one of those companies decided to make themselves more attractive with an unlimited calling plan, the other two completely neutralized that.

In essence, we are where we were before this week, except now plans top out a $99 and you don’t have to worry about overages in that instance. The only companies that might see a big effect are the prepaid guys, MetroPCS and Cricket. And even then, they have unlimited calling and unlimited text for half of what the majors are charging. Their handicap is a limited calling area, so they might lose a subscriber or two. Or people might see the unlimited idea pop up in the majors, and find out that Metro or Cricket works better for them.

So in introducing unlimited rates, the big telecoms created an essential stalemate. It’ll be interesting to see if Sprint does, in fact, undercut them. Will all the other carriers jump on board and further neutralize the industry?

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Filed under : Cell Phone Service



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