Unlimited Limbo: The Shifting Landscape of Cellular Service

Can you hear me now?

Well, if you listen to the messaging within the mobile carriers you hear Unlimited loud and clear, and Deal Seekers love it.  Gone are the days of coverage superiority (sorry Verizon).  Enter the era of the unlimited limbo.  The only question is how low can they go?

How did we get here?

For years is was about maps.  Mainly Verizon showing their coverage superiority relative to AT&T.  It was effective messaging for years which helped Verizon to become the category leader with a market share over 30%.  In addition to the two major players, there were many other low-cost players who were perceived as second-tier.  And if you were deal minded, you may be willing to forego connection quality for a lower price.

Then a few years ago Sprint got the guy.  You know, the “Can you here me now?” guy.  Yep, Paul Marcarelli let people know that basically you can hear me anywhere, because everyone pretty much has 99% coverage.  So, unless you are in the 1% the only difference is price.  Enter the Unlimited plans.

These deals resonate with shoppers (especially Deal Seekers) for several reasons.  The first reason is your mobile coverage plan is a necessity – a means to an end.  And the natural desire for most customers is to get necessity payments as low as possible.  This is not unique to the mobile category.  You will find the same deal desire with mortgages, car insurance, and cable services.

The problem with your mobile bill is “as low as possible” can be a moving target.  This hits home with me and the two teenagers on our family plan.  The streaming video alone can suck your plan dry within days.  Then at the end of the month there is a surprise surcharge for data overages.  So, while my plan is a low monthly rate, teenage usage is rocking the plan to a higher cost with additional fees.

I’m sure I am not alone, and this is why unlimited plans are so appealing to many.  And once you start thinking about what you pay, the unlimited messaging haunts you.  Hardly does a commercial break go buy without a mobile carrier touting their unlimited plan.  The combination of this persistent messaging with the monthly mobile bill wears on customer’s deal seeking DNA.  At some point the customer will act when the effort will be worth the reward of switching plans.

T-Mobile is taking advantage of this deal seeking fervor in the category.  In the last quarter alone they added 1.33 million customers (about 500,000 more than expected) largely due to their unlimited plan.

What about AT&T and Verizon?  Well, they are all in on the Unlimited plan too.  Overall, there is not a large disparity between the carriers.  More often than not, the difference is the free phones thrown in when you switch services.  Switching benefits the shopper, an so why stay with the current provider.

Worth noting is Verizon is still clinging to their superior coverage messaging.  A recent  Verizon commercial  featured a couple stranded in the middle of nowhere (aka the 1% coverage superiority).  You have to question how relatable this “fear-vertising” is.   Really, how many people regularly venture down lonely deserted roads?  For what its worth, they stranded couple did get unlimited coverage.

So, while this Unlimited limbo appears to be commoditizing the category, can a major player break out from the brand pack?

Possibly, but probably not for awhile.  A new service like 5G cellular could allow a carrier to differentiate their brand. However, the projection of widespread 5G service will be in years not months.  The reason for the long timeline is the adoption of new infrastructure and adoption of new phones.  Until then,  many mobile customers will be haunted by their mobile bill until they give into their deal seeking DNA.

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