Consumers with ‘unlimited data’ could overpay by thousands, study says
BOSTON — A new study of U.S. mobile consumers, conducted by Reach Mobile during October and November 2019, finds that 90% of consumers overpay for unlimited data plans.
The report, which surveyed 400 U.S. consumers on major carrier unlimited plans, finds that 1 in 3 respondents use less than 5 GB per month, and 85% use less than 10 GB. The report, which aims to dispel the notion that unlimited plans are the best value for all consumers, includes expert commentary from Mung Chiang, a distinguished professor at Purdue University and recently-named science and technology adviser to the U.S. Department of State on global technology.
Over 90% of customers pay more than $60/month for their unlimited plans, presenting significant savings opportunities for users who don’t consume the typically allotted 20-24 GB of high-speed data. While such plans might benefit carriers including Reach Mobile, consumers end up overpaying.
“This concept of unlimited plans for everyone is founded on perception, not fact,” said Harjot Saluja, CEO of Reach Mobile, a socially responsible mobile service launched this year. “Most Americans think they need a ton of data because they don’t know how much they actually use. We conducted the study because consumers deserve transparency from mobile service providers.”
To avoid overpaying for mobile service, the study suggests consumers should pay closer attention to their actual data usage to ensure they have picked a plan that fits their needs. Individuals that consume enough data to warrant an unlimited plan are outliers.
- A CostPer Line to Data Usage Per Line matrix reveals more than half (58.6%) fall into the High Cost / Low Usage category. These are lines that cost more than $50/month and use less than 12 GB of data on average.
- Fewer than 1 in 4 respondents (22.5%) represent a High Cost / High Usage tier. Interestingly, only 1 in 10 respondents (10.5%) have a Low Cost / High Usage plan, suggesting true bargains for unlimited plans are rare.
- Of the 400 respondents, average length of time with a carrier is 7 years. Despite the longevity, sentiments toward the carriers are lukewarm at best. Only a third of respondents would enthusiastically recommend their plan to a family member or friend.
In addition to collecting data on usage trends, the study seeks to inform consumers of the various discrepancies in unlimited data plans, including data limits, throttling thresholds, and potential for de-prioritization. With more diluted definitions of unlimited data in the marketplace, consumers may want to consider a fixed data plan that doesn’t compromise speed or reliability. Savvy consumers will weigh the trade-offs of having the right amount of fast/highest-quality mobile data or an “unlimited” amount of potentially slower data.
“For many mobile consumers in the U.S., data consumption doesn’t align with unlimited plan value propositions,” said Mung Chiang, Purdue University. “A simple analysis of their data usage could yield substantial month-over-month savings, but consumers operate under the belief that everyone ‘needs’ an unlimited plan. The purpose of this research is to spread awareness of the disparity between mobile data perception and usage and illuminate the opportunities U.S. consumers have to spend less and still have sufficient mobile data at their disposal.”
To download the full report, CLICK HERE.