Unlimited wireless data is overrated

Adding a wireless data plan to your mobile phone is pretty much a requirement these days. Many people actually use their phone for data more than they use it for voice calls. Even if you are a wireless data power user do you really need an unlimited data plan? Probably not.

The big hoopla over unlimited wireless data plans versus tiered wireless data plans really took off last year around the time that the iPhone 4 launched. AT&T had previously been offering unlimited wireless data for $30 per month, but switched to only offering 200MB for $15 per month, or 2GB for $25 per month (they recently added a 4GB plan which also includes tethering for $45 per month). If you had an unlimited data plan prior to this change AT&T has so far allowed you to keep that plan at $30 per month.

As of right now the other three major wireless carriers (Verizon, Sprint, and T-Mobile) all still offer unlimited data plans for phones. The plans are all similar in price, with Verizon and T-Mobile charging $30 per month, and Sprint coming in as the value leader at just $20 per month for unlimited data. The rumor right now is that Verizon will cease to offer the unlimited plan later this year and instead move to tiered data plans similar to AT&T's (most likely influenced by the surge of new data users since Verizon began selling the iPhone).

It's worth noting that none of the carriers offer an unlimited wireless data plan for mobile hotspots or laptop broadband cards. Most offer only 5GB for somewhere between $40 and $60 per month with additional usage charged at around $10 per GB. So why would these same companies offer unlimited data plans for your phone for just $30 per month? The answer is simple. Phone users really don't use that much data.

The carriers like to use the words "unlimited data" as a marketing tactic. "Unlimited" sounds so much better than "2GB limit", yet for most people they might as well be the same. I suggest that you check your wireless usage for a few months and determine what your average data usage is. For many people who just use their phone for e-mail and occasional web browsing the usage will be well under 200MB per month. AT&T's 200MB per month plan is literally half the cost of most unlimited plans at just $15 per month versus $30 per month on Verizon and T-Mobile (and is still $5 less than Sprint's unlimited plan). If you are on your phone all the time checking Facebook and Twitter, using the web, and sending e-mails I doubt that you exceed 2GB per month. So even at that rate you are still saving $5 per month with the $25/2GB per month plan from AT&T versus their previous $30 unlimited plan.

Chances are if you have a smartphone you use it at home at least some of the time, and chances are that while you are at home you can be using your Wi-Fi network for free instead of using your wireless carrier's network. This is one of the reasons that I suggest you take a good look at your actual wireless data usage to see what your true needs are. You may be surprised at just how little wireless data you actually use each month.

As an example let's take a look at my wireless data usage. I use my phone fairly often throughout the day checking my favorite blogs, Twitter, Facebook, e-mail, and random websites. I take the occasional picture with my phone and upload it and I watch a few YouTube videos here and there. When I'm at home in the evening and on the weekend I have my phone set to use my Wi-Fi network. Last month my total wireless data usage was just 380MB.

So who really needs unlimited wireless data? Maybe if you constantly use your phone for streaming media such as Pandora Radio or YouTube videos then unlimited is a better fit for you. Even if you do use your phone to listen to streaming music for hours a day every day at work chances are you will not exceed 4GB of data usage per month. At that level you would be paying $45 with AT&T right now. Of course this is a full $15 higher than the other unlimited plans that are $30 per month, but it looks like that will just have to be the small premium that the very small percentage of users will have to pay if they need more than 2GB of data per month.

Personally I find that the tiered data plans are a better deal for the vast majority of people. As I mentioned above, many people can get by with a 200MB per month plan. At just $15 per month from AT&T this plan is a bargain compared to the unlimited plans. We'll have to wait and see what the pricing from the other carriers ends up being, but it will almost certainly be less expensive than their current unlimited plans, and for most people that will mean a cheaper bill each month.