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The wireless industry has fallen in love with unlimited data all over again

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Written by Kamil Arli

Tech Columnist Roger Cheng claims that the wireless industry has fallen in love with unlimited data all over again.

Just look at the last few months. In January, T-Mobile went all-in on unlimited, eliminating all other options except for its T-Mobile One plan. Sprint rolled out a promotional $50 unlimited plan for singles, and $90 for a family of five (the rates go up after a year). But the biggest shocker came Sunday, when Verizon reversed years of bashing the concept and introduced an unlimited plan of its own.

In an industry as competitive as this, having an unlimited plan is the new free phone offer, or willingness to buy out your early termination fee.

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IT’S A FAR CRY FROM SEVEN YEARS AGO

It’s a far cry from seven years ago, when Verizon and AT&T scrapped their unlimited offering and T-Mobile curtailed its promotional efforts around unlimited. To the carriers, your voracious appetite for streaming video and music was killing their networks, and the idea of letting you loose on your phone became a dirty concept. Sprint, which had been hemorrhaging customers at the time, was the only one willing to give you an all-you-can-eat plan.

Today, unlimited data helps carriers get an edge. Just look at T-Mobile’s fourth-quarter results,which the company reported on Tuesday. The company added 2.1 million total net new customers, and 933,000 phone customers who pay at the end of the month — known as post-paid subscribers — both numbers outstripping the growth from its three largest rivals.

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IT WASNT LOVE AT FIRST SIGHT BETWEEN T MOBILE’S CUSTOMERS AND T MOBILE ONE

It wasn’t love at first sight between T-Mobile’s customers and T-Mobile One. When the company first introduced the plan in August, it drew a lot of flack from people who were miffed that it was eliminating its more affordable, albeit limited, options. But T-Mobile gave it some time (and also kept its older plans for a few months), and last month pulled the trigger on the change after offering to pay the taxes and fees on the plans.

While carriers used to think unlimited would have a detrimental effect, T-Mobile saw a financial boost in the fourth quarter. The company posted a net profit of $390 million, or 45 cents a share, up from $297 million, or 34 cents a share, a year ago.

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Revenue rose 23 percent to $10.2 billion.

Analysts, on average, forecast earnings of 29 cents a share and revenue of $9.84 billion.

T-Mobile shares rose 1.5 percent to $61.80 in pre-market trading.

“These results are proof that doing right by customers is also good for shareholders,” T-Mobile CEO John Legere said in a statement.

Perhaps the biggest indicator that T-Mobile and Sprint’s unlimited push is having an effect is Verizon. The company had scoffed at the notion of unlimited, and the commercials still running on television argue that you don’t need that much data.

Analysts believe that AT&T, which offers an unlimited data plan if you subscribe to DirecTV, may follow suit and offer a standalone unlimited option.

About the author

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Kamil Arli

Editor of DigitalReview.co. Digital Media Consultant

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