• Article

Comparing Cellphone-Service Providers

Secrets They Don’t Want You to Know

Cellphone-service providers dangled a familiar term to describe their 2017 data plans. Consumers, however, should proceed with caution.

Email to a Friend


When it comes to cellphone-service plans, everything old is new again. Specifically, we’re talking about the return of unlimited-data plans.

During the dawn of the smartphone age, cellphone-service providers, or carriers, dangled plans that provided unlimited amounts of data in front of consumers to get them to spring for pricey new smartphones. Consumers responded in droves and overloaded cellular networks, which forced carriers to back away from unlimited-data plans in favor of pay-per-gigabyte plans.

Now, unlimited data is back, or so the major national carriers would like consumers to believe.

All of the so-called Big Four now have unlimited-data plans. Sprint’s Unlimited Freedom plan sets consumers back $50 per month for a single line if they enroll in an automatic-payment program, or $65 if they don’t enroll. AT&T’s unlimited-data plan costs $100 for one line, but it’s available only to subscribers of one of the company’s TV plans, DirecTV or U-verse, which start at $50 per month. T-Mobile introduced its One plan in January 2017. It costs $70 per month for one line if you have auto-pay, or $75 if you don’t, and is notable for its inclusion of taxes and government fees, rather than separating those, as other carriers do.

Beyond the Big Four

Read Now

Verizon became the latest to rejoin the unlimited-data-plan party in February 2017. Its new plan costs $80 per month for a single line if you use auto-pay or $85 if you don’t.

Unfortunately, “unlimited” doesn’t mean what you believe that it does.

LITTLE SECRETS. That’s right. Carriers offer unlimited-data plans to limit the amount of data that you consume. Here is how they do it:

Limited hotspot capability. Sprint’s unlimited plan caps your 4G data at 10GB if you use your phone as a hotspot to share a cellular internet connection with another device—a process that’s known as tethering. If you exceed that cap, you either can pay $15 for an extra 1GB of 4G data or you can slow to 2G speeds, which allows you to surf the web and send emails but nothing else. T-Mobile’s unlimited-data plan provides 10GB of 4G hotspot use and then unlimited 3G hotspot capability after that—Verizon’s plan is identical. Consumers can stream music at 3G speeds, but they can’t stream video or play online games as reliably at 3G. AT&T’s unlimited plan doesn’t provide hotspot use at all.

Limited 4G data. This is the dirtiest little secret of the unlimited-data plans: You get unlimited data, but it isn’t unlimited 4G data. Every unlimited-data plan that was available as of press time caps the amount of 4G data that you may use before your speed might slow to 2G levels. T-Mobile’s 4G limit is adjusted dynamically every month and affects the top 3 percent of the carrier’s data users—typically those who use 26–28GB of data. AT&T and Verizon begin to throttle back your speed when you pass the 22GB mark, while Sprint puts the clamps on at 23GB of data.

This speed throttling isn’t permanent. It kicks in only during a period of “network congestion,” and you should be able to return to 4G speeds after that period passes. Adrienne Norton, who is a Sprint spokesperson, says that Friday typically is the busiest traffic day of the week, and that 4–9 p.m. is the most likely time of the day to experience congestion on the carrier’s network. Bethany Frey of T-Mobile adds that network congestion can involve so many variables, such as being in a densely populated area or at a crowded event, that it’s difficult to pin down a day or a time when congestion most likely will occur. You can track the amount of data that you use by downloading your carrier’s mobile app, but other than a noticeable difference in your smartphone’s performance, you have no way to discern whether you are in a period of network congestion.


THE NEW MATH. With these limitations, it doesn’t make sense always to spring for an unlimited-data plan, says Roger Entner, who is the founder of research and consulting company Recon Analytics. That’s because—as with T-Mobile before them—AT&T, Sprint and Verizon stopped charging new customers automatically if they use up their monthly data allowance. Instead, Sprint and Verizon (but not AT&T) now provide new customers with a choice: You can pay nothing extra but surf at slow 2G speeds until the next billing cycle (the policy that T-Mobile instituted in mid-2014), or you can pay $15 per gigabyte for an additional 4GB of data. In other words, the traditional overage charge now is optional.

As a result, every data plan essentially now is an unlimited-data plan for new customers. What you pay for now is speed, or, specifically, the amount of 4G-data speed that you want per month.

Click chart above to view full presentation

Click chart above to view full presentation

With this in mind, the math on unlimited-data plans might not add up if you don’t use more than 20GB of data per month and, particularly, if you have to have at least 10GB of LTE hotspot usage per month. AT&T, for instance, offers a 25GB data plan for $110 per month. That’s $10 more per month than what the carrier’s unlimited plan costs, but this plan doesn’t require a subscription to a TV service, includes 4G tethering and actually provides 3GB more 4G data than does the unlimited-data plan. Plus, if you exceed 25GB, your smartphone performance just slows, as it would in the unlimited-data plan when you hit 22GB, rather than you being charged extra. However, at Sprint, for example, the $50-per-month Unlimited Freedom plan is a better deal than is its $80-per-month 24GB plan as long as you don’t have to have more than 10GB of 4G hotspot access per month, because the unlimited plan caps the feature at 10GB. (T-Mobile will phase out its Simple Choice data plans.)

It also is important to note that not all data use is treated equally. When AT&T customers stream DirecTV content, for instance, it doesn’t count against their data use. Likewise, Verizon customers can stream video from the company’s Go90 service without it counting against their data use. Sprint, however, has no such freebies. Existing T-Mobile customers get a range of data-free streaming options through the company’s Binge On program, although new customers of the unlimited One plan don’t get those options.

AT&T and Verizon also got creative with how consumers manage their data. AT&T introduced in 2017 a feature that’s called Stream Saver. The free service lets you reduce the quality of your video stream to 480p, so you don’t binge-watch away all of your allotted data for the month. You should know that the default setting for Stream Saver is “on,” so if you want to watch high-definition (HD) video, you have to turn off the service. (You can turn it on again online.) According to Entner, only “eagle-eyed” consumers can spot a difference between 480p and HD video on their smartphone screen, although you likely would notice pixilation if you stream to a tablet computer that has a high-resolution screen.

Verizon’s PopData service, which was introduced in fall 2016, lets you purchase 30- or 60-minute “all you can stream” 4G data sessions for $2 and $3, respectively, so you can engage in a data-intensive activity without dipping into your monthly data bucket. If you have, say, a 4GB data plan and are at 3.9GB at the end of the month and want to stream that last episode of your favorite show, it makes more sense to spend $3 for an hour of 4G data instead of the $15 that you’d have to pay to buy an extra gigabyte.

If you want to steer clear of unlimited-data plans, we believe that the best deal among the big four is available from Sprint, which halves the price of a competitor’s monthly rate for customers who switch to Sprint. Sprint’s 50-percent-off plan doesn’t allow you to roll over unused data to the next billing cycle, which is an option for AT&T and Verizon customers, but it allows you to share data among multiple lines, and it supports mobile hotspots at 4G speeds. Sprint offers data packages from 6GB to 50GB, and new customers receive the 50 percent off through Jan. 31, 2018, Norton tells Consumers Digest, regardless of when they sign up. After that, they’ll pay the full amount. (As for consumers who already are Sprint customers, we believe that the best deal as of press time is to remain with Sprint, because its data rates are lower.)

NETWORK NEWS. The big four carriers made significant improvements in their networks in 2016 when they turned on a technology that’s called LTE Advanced (LTE Plus, in Sprint’s parlance), or LTE-A. LTE-A encompasses several distinct technologies that deliver the same thing: faster download speeds for more users at once. Whereas a typical 4G LTE network could deliver download speeds of 5–12 Mbps, LTE-A peak speeds from the major carriers have been measured at 200 Mbps, says Dave Williamson, who is an independent consultant and the former president of research company RootMetrics.


Verizon brought its LTE-A network to 461 cities that cover about 90 percent of the U.S. population in 2016. T-Mobile, which started to implement LTE-A as far back as 2014, now covers 425 cities. Sprint has 250 markets that cover a majority of the country, Sprint Technology COO Gunther Ottendorfer says. AT&T enabled LTE-A in the “vast majority” of its LTE network, spokesperson Meghan Callahan tells us. All four carriers are expected to improve and install LTE-A technologies throughout 2017 that will enable not only faster downloads but also better upload times, Williamson says.

Carriers don’t charge you more to access their LTE-A network, but you have to have a smartphone that’s compatible with LTE-A to access its higher speeds. Otherwise, you’ll get LTE speeds. Fortunately, it’s easier to tell whether your smartphone is compatible, and more new models are. As of press time, Verizon had at least 40 LTE-A models out of a total of 52 smartphones that were available to buy online, and the carrier labels all LTE-A-enabled phones clearly on its website. Company spokesperson Howard Waterman tells us that Verizon plans to have every new smartphone on its network be compatible with LTE-A by the end of 2017. The same goes for Sprint, Ottendorfer says.

AT&T and T-Mobile hadn’t disclosed their 2017 plans for LTE-A phones as of press time, but considering that smartphone-makers are building support for LTE-A into their models, we believe that it’s reasonable to expect that the majority of smartphones that are introduced in 2017 will be LTE-A-ready.

NOW HEAR THIS. All five of the analysts whom we interviewed agree that Sprint and T-Mobile improved the reliability of their networks significantly over the past 2 years. “Sprint and T-Mobile have become better networks in more places,” Williamson says. “They’re becoming stronger national networks.”

However, Sprint’s ubiquitous—and accurate—TV-ad claim of a 1-percent reliability gap between it and AT&T or Verizon belies what that 1 percent means to consumers. Entner explains that a 1 percent difference in, say, the dropped-call rate can be noticeable.

More important, every analyst whom we interviewed says national rankings ultimately are irrelevant, because most consumers don’t travel across the country on a regular basis. “Ninety percent of consumers are spending 90 percent of the time in mostly the same place,” Entner says. So, the metric to which consumers should pay attention is local network reliability. AT&T and Verizon have the better odds of being the most reliable network in your neighborhood, Williamson says, but plenty of locations exist where two or three networks are equally as reliable.

Case in point: Verizon scored the highest nationally in RootMetrics’ most recent survey of wireless performance. However, if you lived in, say, San Antonio, AT&T was the performance winner, while T-Mobile took top honors in Providence, Rhode Island.

JUMP FOR JOY. Consumers shouldn’t expect big changes in the way that the big four sell smartphones in 2017, says Brian Haven of market-research company IDC. However, whereas AT&T, Sprint and Verizon limit how often that you can upgrade a phone (unless you want to continue to buy a new one outright), T-Mobile introduced a program late in 2015 that lets you upgrade your phone three times over a 12-month period. We believe that it’s the most attractive deal for those who always want the latest and greatest technology.

Called Jump On Demand, the plan involves an 18-month lease. During that period, you’re eligible to trade in your smartphone (provided it’s in “good condition”—a term that we have no reason to believe that T-Mobile manipulates for its own purposes) for a new model up to three times over a 12-month period. Jump On Demand has no extra or hidden fees, but your trade-in options are limited to the base model of each phone or the phone that has the least amount of internal memory. You can make a one-time payment to access models that have more internal memory. (The amount varies by phone—for instance, you’ll have to pay $100 upfront to get the 128GB version of the iPhone 7 but nothing upfront for the entry-level iPhone 7.)

For avid upgraders, buying three new phones over a 12-month period might be enough to scratch the upgrade itch. For those of us who are content with the more modest (but still rather brisk) 24-month upgrade cycle, we only can scratch our heads as we ponder having to transfer all of those apps and passwords from one device to the next.

Greg Scoblete is a journalist who has covered technology for 15 years for This Week in Consumer Electronics, Photo District News and RealClearFuture, among others.

Back to Article