Monday, February 13, 2017, 1:23 PM ET|Posted by Will Richmond
Another day, another move by a major wireless carrier that further boosts mobile video. Yesterday, Verizon announced that it is offering unlimited data plans, for $80/month for the first line and $45/month for subsequent lines. It’s the first time Verizon has offered an unlimited data option since 2011 and is yet another sign of how aggressively wireless carriers are embracing mobile video as a key value proposition, in turn pressuring their business model of incremental payments for data usage.
T-Mobile has been arguably the leader in this disruption, not only offering unlimited data but also its Binge On program that now includes over 120 different services. It’s also offering a free year of Hulu, on top of a free year of DirecTV Now to AT&T customers that switch to T-Mobile. For its part, AT&T also started offering unlimited data, for $100/month, but only if the subscriber also signed up for DirecTV Now.
The ongoing loosening by wireless carriers of their data plans was one of the 7 reasons I recently cited for why mobile video is at a tipping point.
Verizon’s new unlimited plan doesn’t have any similar buy-in condition (e.g. subscribing to FiOS), and also clearly emphasizes “HD video streaming” as a differentiator (which it is compared to T-Mobile’s Binge On which compresses the video quality). However, Verizon is reducing quality for subscribers after they’ve used 22 GB of data in a month.
3 other things are interesting to note about Verizon’s new unlimited offer.
- It further clouds the value of “zero rating” of wireless carriers’ own video services (e.g. AT&T and DirecTV Now). Zero rating has been a bugaboo for net neutrality advocates who worried carriers’ owned services would get priority. However, with unlimited data, zero rating becomes irrelevant, unless the carrier is doing any prioritization of its own video services, which we haven’t seen.
- It will likely accelerate the “reverse migration” trend of mobile data moving from WiFi back onto carrier networks that Cisco identified in its most recent mobile VNI forecast. WiFi has been a boon to both carriers and consumers, but with unlimited data, the incentive to find and connect to public WiFi diminishes.
- Unlimited carrier data plans mean that cable operators such as Comcast and Charter will likely have to focus more on lower consumer prices to entice subscribers to their pending mobile services than unlimited access enabled by WiFi. Cable operators have the benefit of extensive WiFi to offload traffic and reduce rates. This will be critical to offering lower rates.
Verizon has been the major wireless carrier most staunchly resisting unlimited data. But now that it has introduced unlimited data, which is bound to be quite popular, given the current “L” plan is just $10/month less but only includes 8GB, mobile video consumption will continue to increase. With all of the other tailwinds mobile video currently has, the industry is poised for much more growth.