Why you don't need an unlimited data plan

Unlimited data plans are back. Here's some insight into why, as well as a look at how much data we really use every month.

We've recently seen all four major U.S. carriers introduce or revamp their unlimited LTE data plans. Multiple times. For some of us, this is great news. The folks who use upwards of 10GB of data on a line they pay for themselves found plenty of creative ways to hold on to older unlimited data plans, and sometimes that could be a hassle. Now they are available with a click of the mouse.

Unlimited plans coming back to AT&T and Verizon are a direct result of tough competition in the industry.

This wasn't unexpected. Companies such as T-Mobile and StraightTalk made people notice the cost versus value proposition of a cell phone data plan. AT&T and Verizon enjoyed a consumer mindset that they offered something superior, when for many people alternatives could be just as good. When people started to take note of that, it was time for a small shakeup.

People who will utilize an unlimited data plan and get their money's worth are outliers. Everyone can have a month where they are traveling or otherwise away from Wi-Fi and use a good chunk of data, but when you look at the numbers telling how much data is used per person on average, you see that most people would be better served with a cheaper plan (opens in new tab) that offers a capped data allotment.

The numbers back this up. According to NPD Connected Intelligence, one of the groups that your carrier and the company that made your phone use for insight into growth and planning, in 2015 the average amount of data used per person per month was about 3.5GB. During the same time period, customers on T-Mobile used an average of 5GB per month and Sprint customers used about 4GB per month. Both carriers offered unlimited data plans to any post-paid customer.

Why this is important

These are average numbers. That means some people will be wildly outside the average on both ends. You might use 100GB of data per month but someone who uses 0.1GB per month offsets your input towards the average. An average can't predict the highest amounts of data being used (or the lowest) but it is a great way to determine how much data the average person uses each month. There's a lot of ways this data can be used, and of course multiple ways it can be interpreted. For example, the average data a customer with access to an unlimited data plan uses isn't dramatically different from the amount someone without access to unlimited data uses.

People talking about new unlimited data plans means that they are doing what they were meant to do: Hype.

This means that the average person, regardless of network, doesn't need to pay for an expensive unlimited data plan. Unlimited plans are hype-fests that get everyone talking about something as mundane and boring as a cellular provider. The hope is that you'll decide you need to sign up for one even though you don't need one. Sure, you might use a little more each month knowing that you have an unlimited plan, but generally, people who weren't using large amounts of data before aren't going to use a lot of data after they switch.

None of this matters to the phone company. It has one goal: make money. That's how businesses work. Every decision, every promotion, every marketing campaign and everything else is a way to try and make more money. A company won't be around for long if it isn't trying to bank a profit. And sometimes, how that profit can be shown on a quarterly earnings report matters as much as the amount that goes into the bank.

The ARPU

The average revenue per unit, or per user, (ARPU) is the total revenue coming in from the service divided by the number of subscribers. It's also a pretty big deal in shareholders' reports and earning's calls.

ARPU is a number that translates into the amount of money a single line of service brings in over a set time. There can be a monthly ARPU, or a quarterly or yearly one. This number includes all the money you pay to your carrier minus tax and regulatory fees. That means things like extras you may be paying for (international calling or live TV for mobile devices) are included, as well as your normal contract or monthly price. The ARPU is an easy way for a company to track its income and growth over time, and each customer who pays for an expensive unlimited data plan brings this average up in a way that's statistically significant.

Your carrier wants you to be excited about, and ultimately sign up for, an unlimited data plan because of how it affects the bottom line as well as how much.

Another way your phone company looks at its finances is with an eye towards profit instead of just income. The profit from a customer can be more important than the overall income generated from one. A company can be healthy and profitable even with a low customer count, or vice versa. We see this in action when companies give earnings results.

Consider a hypothetical that's not too far removed from actuality. T-Mobile keeps pulling more and more customers away from Verizon Wireless. But Verizon is making more money and has a higher value. That means Verizon is making more profit per customer than T-Mobile.

Calculating profit is pretty simple. The service an account uses is tallied then compared to the amount of income that account generates each month. If you sign up for an unlimited data plan and still only use 3GB to 5GB of data per month, you help improve profit margins. All accounts are profitable, but some will be more profitable than others.

Don't hate the players

We're not trying to say your carrier is bad or unethical. This is just how business works when it comes to service providers.

Carriers need to offer you something that you feel is worth the monthly cost. If that means an unlimited data plan sounds like a good idea to you, one is available for you. With the U.S. telco market becoming more and more competitive, it was a given that all companies would offer a fixed service that included unlimited data for a fixed cost. Users who needed such a plan would sign on and help improve that income per customer metric, and users who didn't need an unlimited plan but signed up for other reasons helped improve the profit-per-user metric. This is how smart business works, and the people in charge at your carrier are smart businesspeople.

One thing to take away here: ask yourself how much data you need every month. No one answer fits everyone, but there is an answer that fits you. Compare how much you need to how much you're paying, and then check out what's available. A final metric that's harder to measure is how happy a customer is, and happy customers are loyal customers.

Make sure you're using a service that works for you and makes you a happy customer.

I'm an RHCE and Electrical Engineer who loves gadgets of all kinds. You'll find my writings across Mobile Nations and you can hit me on Twitter if you want to say hey.

111 Comments
  • Yes the hell (i'm sorry) do!
  • No need to apologize, Reynaldo... Just get everyone tacos, and everything will be A-OK.
    🌮🌮🌮🌮🌮🌮🌮😍
  • Is there any actual reason for this comment rodney? There's absolutely no room for ignorance around here or anywhere for that matter, take that somewhere else.
  • ? Ummm What's your problem? I'm being nice, just being silly. "no need to apologize, buy us tacos instead"... Besides being silly, how tha hell is that ignorant? Are you having a bad day?
  • He's probably taking it personally por su nombre but like its American food so I don't get it either... 😅
  • I prefer quesadillas myself, someone's getting food? 😋
  • I hope so, I'm staving. How about pizza! No anchovy please.
  • No anchovy, heavy on the pickled herrings.
  • Well, those numbers are because of the restriction people have on their plans, but release the unlimited data to everyone and lets see if we dont open clinics of data adict rehabilitation. LOL
  • I need at least 200 GB data per month. I do not mind how I get it.
  • watch less porn dude
  • Move to Romania, lol
  • Pushing this tmobile mint sim **** way too much. How much they paying you???
  • Stating this again, yes I do. There's no WiFi in my office that I'm allowed to use. So data it is. First, it gives me peace of mind.
    After switching back to unlimited I use about 15GB a month, and it's a good buffer if I need more.
    Turning on Auto-Download on podcasts and stuff, using cellular to upload photos and such. It makes my phone work to it's full potential. Well worth every cent.
  • Yea... exactly where are these studies coming from I regularly use at least 40 GB of data a month.
  • Okay, how does anyone use more than 5-10GB of data? What are you doing that requires 40GB a month? Seriously, I have a hard time trying to even use all of my 3GB a month
  • 4k video auto uploads. Or downloading movies. That's the only way they could hit that mark, in my eyes...
  • Using the phone as a mobile hotspot for a laptop/tablet
  • But, AT&T's Unlimited plan does not include Hotspot! they suckered me in, discovered the next day and switched back.
  • That's why I used Interop Tools to remove the restriction so I can use hotspot on my 950XL
  • Me too. 
  • I use more than a gigabyte daily
  • Just checked 65gb last 30 days. All on wifi.
  • I let my kids tether while in the car... best invention ever that unlimited data thing
  • We live in a small Texas city on the border w/Mexico. There's no such thing as "public wifi".  Cell data or nothing until you get home.  We stream music and video (not just for personal entertainment, but in our work w/community theater). We also take a LOT of pictures and shoot a lot of video. We are both set up to automatically upload everything to OneDrive. So, we easily eat through data plans.
  • I have 6 lines on my plan that share data. In order to give everyone a decent amount of data, the unlimited was the best option for me. It also helps that I have AT&T and DirecTV. With the unlimited, I get $25 off of my DirecTV bill as well as free HBO, so that's another $18 off.
  • My plan gives me 4GB a month, last month I used less than a 1GB. I'm always on Wifi, at work I don't have signal so use Wifi etc etc
  • Yeah, my pre-paid plan gives me 1 GB for 90 days and I barely use even half that. I can bump it up for an extra $5 / 90 days, but I don't see the point. I almost always use WiFi, and rarely even turn mobile data on. My wife might manage to get through almost the whole GB in 90 days but it's never gone over. So yeah, unlimited data isn't necessary for us at all.
  • So many comments saying "I need unlimited data". There will always be exceptions, but most average consumers do not need unlimited data. I used to use 4GB per month on my 2GB plan. AT&T has since given me a free upgrade to 6GB and rollover data, so I regularly have around 10GB each month. I started streaming less and saving things for offline playback. I listen to YouTube videos on my drive every day, and I don't use a bit of data. This month I might use 1GB. Offline playback was also necessitated because service is horrible at my job. It doesn't matter who your carrier is. Data speeds are terrible. Yes, there are people that regularly stream Netflix at full HD and regularly have video calls, but the average person doesn't need unlimited. I've asked people with grandfathered unlimited data how much data they actually use and none of them knew. However, they all complained about how expensive their bill is. An unlimited family plan makes sense, but I'll stick with my 6GB + rollover for now.
  • Speak for yourself.  I regularly used 100 GB a month on GoPhone.  The fact that I can finally access that data without being throttled is icing on the cake.  I enjoy YouTube Live, Instagram Live, and Periscope.  You need unlimited data.  I don't like to wait for WiFi when backing up my videos.  Again, unlimited makes things a lot easier. And the real case for unlimited is streaming Netflix and Hulu.  It is not like unlimted is $100 a month, like it used to be.  These days you can get unlimited for $60 a month.  People are going to use their data if they don't have to worry about being throttled.  I'll take being deprioritized.  But the throttling thing is a deal breaker. If you don't mind downloading and caching everything, and being disciplined and resourceful, stick to a metered plan.  GoPhone's 8 GB plan may work for you.  But if you want the freedom of doing what you want to do, when you want to do it, go unlimited.  It just doesn't make any sense not to.  With the exception of the hotspot, there really is no reason to remain on a metered plan unless cost is an obstacle. It is not that fast and the phone companies have tied down speeds so that there is plenty of infrastructure to go around for everyone.  You're paying for the service, so go ahead and use it.  If everyone goes unlimited, and they have to change things again speeds will get even slower.  Their issue, not mine.  
  • When you say, "you need unlimited data," you're simply speaking for yourself.  Change that to, "I need unlimited data" and you're closer. As the article and many comments state, most people don't need or care for unlimited data.  I typically use around 1GB a month.  And that's fine for me.  I don't stream videos, hardly stream music, and simply back up my photos when I'm charging at home and have access to my Plex server.
  • If a person only needs 1 GB a month then this article doesn't even apply to them.  This is an article trying to persuade those of us using unlimited data to go back to a metered plan.  All of the tech blogs put these types of articles out, and then they try to shame us for being heavy users.  It's like a vegan trying to shame us because we like to eat meat.   I never understood why someone that uses a set amount of data concerns themselves with what those with unlimited plans are doing when at the end of the day it is the phone company creating us against them scenarios with their consumers, to help absolve them of what they're doing with their networks.  Yet the person paying $30 for 1 GB is getting even worse value for their money than someone paying $40 for 3 GB.  If someone wants to pay $30 a month and spend their money in that way it is their business. Nothing I would write an article about and try to convince them they should not be doing.
  • I didn't view the article as shaming, just informational for people who might not pay attention to their usage.  Maybe it's a slow media day for Jerry. Isn't the point of unlimited: "Hey, you don't care how much data you use and neither do we*!"  For me, it's simply a matter of cost and the number of lines that I have.  Yes, I realise that paying for 2GB of data is more expensive per GB than larger plans.  But, I don't usually use it, so I'm simply cheap. * Disclaimer: Unlimited plans still have limits after you've exceeded a certain amount.
  • Deprioritization is something I can live with.  I reach 22 GB, if the towers are busy, then my speeds are slow as the other users that have not reached their threshold yet get quick speeds, once things clear up again my speeds are as quick as they were before.  Reasonable, and it is the way that post paid users have always been treated. Throttling is harsh and unusal punishment.  Speeds are slow until you purchase more high speed data or until the next billing cycle.  Those are the rules in place, and they are clearly designed to get users to continue to purchase buckets of high speed data.  Some services, like Cricket, allow you to change your plan twice in a cycle.  Others, like GoPhone, you're stuck.  If it were up to me everyone would be deprioritized, but at different points.  So, if you only paid for 1 GB, you get deprioritized after that first GB and people who paid for more than you enjoyed high speeds.  Or you could continue recieving data but at a faster speed than you would otherwise; say those that paid for 1 GB would get 1 GB at fast speeds, and the rest at 2 mbps.  Someone who paid for 5 GB would get 5 GB at fast speeds, and the rest at 3 mbps.  There are phone plans that allow customers to recieve unlimited at "3G" speeds, for a set rate.  As the speeds are 3G no one is ever going to cause any real bottlenecks there.  But being throttled to 2G is insufferable, IMHO, especially when 2G ends up being like 32 kbps or something rediculous instead of the 128 kbps max phone companies advertise.  
  • I agree on the throttling.  It's simply a marketing thing to get people to pay for more.  I'd love to see your idea come about, where everyone gets deprioritization, but we both know that phone companies wouldn't make money that way.  And there's nothing sadder than a mobile phone company that doesn't make billions in profits.
  • Yeah it is a pipe dream  At least here in the States.  Sounds like other countries already have this in place.  At least it isn't as bad here as it is up in Canada. 
  • It's not so much that I am concerned about how much data those with unlimited are doing with it (and I specified "I" because I really don't know who all you have ran into that is worried about data usage so don't want to speak for them).  Just some of the amounts that I hear being used (200GB?!? someone said that above... or even the 100GB you mentioned) seem pretty extreme to me.   So for me personally when I ask about it, it's not supposed to be shaming anyone who uses a lot, but more a curiosity type of deal. I just wonder how anyone can use that amount of data. I struggle trying to use 3GB a month, so there is disconnect between the amounts of data usage. So sometimes it's not to be concerned with it, but more of trying to understand. I just like to be able to connect 2 and 2 together and come up with what is being done to use that amount of data. Then the disconnect can go away. Often times though, most people refuse to mention what they do with their data. And maybe it's because of the whole shaming thing that you mentioned, but some people really do not mean it that way and are just curious. Even my home wifi barely reaches 200GB a month, but I know how it gets that high, Netflix streaming usually several hours a day. In the end, use the data you want to use! I don't care how much you use or for what, I just like to understand :)
  • I've read more than a few articles about how you don't need unlimited arriving at the same conclusion.  That is the point I was trying to make. If you don't have WiFI, you can easily use 20 GB just minding your own business watching videos on Facebook and YouTube.  I don't have cable, I don't use an antenna, and i don't listen to the radio.  Everything I do is onilne.  If I read a book, I do it online.   For some it is not that they do everything on WiFI, it is more about the fact that they don't anything online unnecessarily.  They're not syncing their computers and smartphones with the cloud, they're not streaming, they have a life and they do what they need to do through other means.  And that's cool.  But a lot of us are addicted to the Internet and we'll stay on Periscope or Instagram for hours at a time.  I had a problem with Vine a few months back.  People thought I was annoying.  I'll be waiting in line at a barista and pull out my cell phone and watch something on Netflix.  I watch Netflix while I'm waiting at the bus stop.  Those are the people that use 200 GB a month.  Or gamers with their headsets on all day streaming themselves through Twitch.  
  • Yep, I can see how you use that much data.  I'm not like that, so obviously we have different use cases. :)
  • Makes perfect sense! I can totally see how you would use that amount of data. I would say you definitely need unlimited. Thank you for your explanation :)
  • I'm currently on a single line plan with 1GB for $60 a month. I don't currently use my phone for anything other than phone calls, texts, emails, social media, GPS, etc. Pretty basic stuff. I really need to revisit my plan though because with my work discount I could get unlimited for $68, which means I could do a lot more with my phone, like streaming media, which would be nice.
  • Gotta ask, which carrier offers that discount?  I know that Verizon has no discounts on unlimited plans.
  • It's more about who you work for. Almost all carriers give a discount on at least a portion of their service, if you work for certain companies or organizations.
  • My works gets the best discount with Verizon, offering 20% off (of the data package only), but they don't offer it on the unlimited plan.  I'm glad there's still somebody offering this.
  • If you think about it, all the people not getting discounts were basically just subsidizing the people who were. Unfortunately, removing the discounts and putting everyone on the same payments doesn't really seem to be affecting their pricing. It does suck that they got rid of the majority of their discounts and that we have no say in their policy. All we can do is shop around and try and find the best deal with a reliable carrier.
  • Wait, what? $60? I pay cricKet $30 for that plan. 
  • I know right.  Cricket you get unlimited for $60, or 12 GB if you need the hotspot.  I was curious who the phone service was with.  
  • Most the big 4 carriers so that even if you do only need 5-10gb, it's still cheaper to get unlimited.
  • Everyone's going to be different. I don't do a lot of streaming media on my phone and take advantage of that microSD to store things offline for listening. Most of that is queued up while on a wireless network. I'm regularly near a wireless network so tend to use that. When I'm out and about my data use is pretty light. I was grandfathered into an unlimited plan for ages, but regularly using in the 100's of MBs of data monthly. My wife would go over her smaller plan often, especially when traveling. I put us on a shared plan of 5GB and that's usually enough. I bump it up if we'll both travel because I know we'll use more while on the road. Different needs for everyone, though. I can see where some people use that unlimited data quite a bit and glad that it's an option for them. If I were constantly on the road, tethering through my phone for work, I'd probably lean towards an unlimited plan.
  • We are an outlier - we do not have the availability of Wi-Fi at home due to our location. Verizon's change to an unlimited plan cut our monthly cost almost in half. Still expensive, but better.
  • Testing Comments for a user with issues
  • I have a 4gb plan on Verizon with rollover data. So what I don't use gets rolled over. So why pay for a unlimited plan when you have rollover data
  • I used 18GB a month. I have and require an unlimited plan. Bad article is bad.
  • I really think most people either use a ton of data, or pretty much none.
    My wife and I share a 2GB plan and regularly use ~300MB of data a month. Be it work, home, school, church, restaurant, etc. We pretty much have WiFi everywhere we go. When we are out-and-about our maps, music, and podcasts are all pre-downloaded. About the only data hit is checking the occasional website and downloading email. We have so many roll-over GBs that when we go out of town we can splurge on data to our hearts content with no issue. But at the same time, some people have crap internet at home, or work in places with no internet (or are scared their browsing habits are watched)... or they are just straight-up lazy and don't realize their phones have wifi to being with. I have some friends who regularly go through 100+GB of data on their phone because they are constantly video conferencing, or working in areas where they are there specifically to fix an internet issue. But when the average Joe-Bob says they use 20+GB of data I always wonder... how on earth do you do it? And I suspect that they tout their highest bill ever, when their normal average is much MUCH lower.
  • I used 100 GB regularly downloading movies on YouTube.  I did not have WiFi at the time.  I was also running a hotspot to several devices.  Sometimes I would use that hotspot to watch television through my Roku.  Picture sucked, usually 240p as I was throtled but it was better than whatever was on the antenna.  
  • Good lord go outside or buy a tv.....
  • When one works with kids (or those who have kids) or uses their phone for work and one doesn't always have access to wifi one needs unlimited
  • I had an unlimited data plan before deploying. I suspended my line not knowing they would get rid of unlimited data (greedy, arrogant bastards). I came back and was limited to how much data I could use. I used (thanks to AT&T) only 2GB of data a month (because I turned off data after two weeks in). Limiting data while paying a lot for the service was painful. This is is why I switched to T-Mobile, to get an unlimited data plan for less $. My first month, I used 14GB. While some don't need unlimited data, others do.
  • Are these studies conducted on Users who have data caps? Sounds like cell companies trying to justify their horrible data limits. Can you honestly tell me that Mobile Nation staff survive on measly 3GB of data?
  • Put. The. Phone. Down. Go. Outside. With. Phone. Off. You're. Welcome.
  • Hey.....go take a short walk on a long pier, enjoy that sea air. Then go home. Leave me alone. 😁
  • There are people who are fine with no data use due to WiFi connectivity and that's fine. The problem was that most cell companies moved away from plans for those of use who need data. I am paying less now with three lines of all unlimited service compared to two lines before with 1 line grandfathered unlimited data and 1 line 2GB data.
    I stream music, movies, podcasts, and now don't have data limit anxiety.
  • I have a 3 gb data plan and because of WiFi I never go over that. Also my phone plan here allows for removing text message function and because I use line and fb messenger my phone bill is about $21 usd 😁 I'm so glad I don't have unlimited data because I really don't need it.
  • Right now, I have 8 GB on Verizon for my wife and I.  I looked at the unlimited plan, but it would be about $50 a month more than I am paying now. I get a corporate discount for my plan now, but that is not available on the unlimited plan. We have gone over the 8 GB a couple of times, and the throttling makes accessing the Internet almost impossible. But I will put up with it until we need to add lines for my two daughters. When we do, then going unlimited will make more sense $$ wise. I would use more data if I had the unlimited plan for sure. Right now, we have our photos and videos uploaded on WiFi only.  Allow upload over the cell network alone would probably double our data usage.
  • I need unlimited data because I can't get internet service at my house..
  • Why are we going off 2015 numbers btw? Maybe because WiFi is more readily available these days? Not necessarily - perfect example is myself, due to being out and about more than usual, just passed my 8GBs on Cricket for the second month in a row. Doesn't happen much but when it does, I'm stuck using the crap slow speed or pay $10 for an extra gig (which of course is a waste if it's not absolutely necessary, and will get eaten up quickly either way).
    Point is, unlimited does make sense, and pricing really is way better than in past years (previous Big Red unlimited data plan user here).
    I feel the real issue here is ACTUAL versus ADVERTISED coverage and speeds.
  • I have unlimited data because I'm wasteful and self indulgent and don't need it. but it makes me feel WealthyHealthy in a chronically ethically poor and uncaring world. but hey, I'm ok and that's all that matters.
  • I have 5 lines unlimited and it includes a separate Wi-Fi hotspot allotment for each line for $140 a month on T-Mobile . To me that is value! This article definitely doesn't apply to me!
  • I ditched my WiFi when Continuum came along. Here in UK I get unlimited mobile data with a 30GB hotspot for £27 a month. What I can't do on mobile I do via laptop. Everyone has different needs determined by the choices available to them.
  • My wife and I don't have an unlimited plan (because what AT&T and others actually offer is a USABLE data rate up to 10GB or so and then you're throttled back to 2G speeds after that, which is useless where we are). But we have 35GB on our family plan.  We routinely use, in normal use, 25GB+ each month.  Why, you may ask? Because we live on the Texas border w/Mexico.  Most business don't offer gratis wifi, and as small as the town is, most of those publicly accessible wifi points are concentrated in a smaller area.  So, 85% of the time, you WILL be use data.  We don't have local TV here, and the three local radio stations are....lame, at best.  This means, most of the time we are streaming music or video.  So, your article is great if you don't live in a rural area.
  • Another issue is that applications are poorly written.  A lot of us are using data when we do not need to.  Redownloading content when we should be able to go back into the cache.  Even though apps have these features built in, unless we specifically look for it within the app we'll never know the difference and then we're off downloading something all over again.   Data conscious consumers know what to look for but everyone else just continues to do whatever they do, run out of data, and then go into their wallet and buy some more.  Is it a conspiracy to sell more data?  We'll never know. 
  • I'm at 78.7Gb data used right now.
  • You guys in the US pay way more than everyone does, why should be the question imo :P. I have unlimited texts, minutes, data unlimited and 30 Gigs for tethering all that for £19.
  • Geography.
  • Which facebook app is that in the picture?
  • I'm on Cricket Unlimited, they don't drop my videos to 720P until I hit 22GB. I do need unlimited.  In my area we only have DSL at $50 a month. They require you to have something called a "land line phone" which is another $50 a month. I looked it up on Wikipedia and its this old fashioned phone from my grandmas days. You talk through the wires or something. I don't really understand it, or need it.
  • DSL you might as well just stick with Cricket.  Even GoPhone unlimited throttled to 3 mbps is faster than DSL.  
  • LOL how ignorant......wait until u break your precious iphone....u wish u had a landline...then again you probably dont know anybody real number by heart either...
  • As a former telephone installer, I have never, and will never, wish I had a landline. They are outdated tech, and in my experience, less reliable than a cellular device.
  • Hi ya i am one if those people who used like 50gb of data a month because of my job and streaming tons of movies and TV shows. So it works and is cheaper for me
  • Rehashing a two month old article. Guess Mint threw some more money at WindowsCentral.
  • True dat....these paid articles are becoming annoying.....