Verizon is finally bringing back unlimited plans. Yes, the plans come with catches. But they're great news for Verizon customers who want to stream or upload lots of video. At least as long as the company faces enough competition to keep up the pressure—in other words, as long as the big four don't become the big three.
Verizon was the last of the big four wireless providers to once again offer unlimited data, which had all but disappeared just a few years ago. So why the recent resurgence? Competition—from T-Mobile, in particular. Since 2013, when the company launched its "Uncarrier" campaign, T-Mobile has simplified its pricing, disposed of annual contracts, and routinely gives its customers free pizzas and movies. Those consumer-friendly moves—and the company's greatly expanded coverage—forced the whole industry to take note.
But the competition might not last. T-Mobile's parent company, Deutsche Telekom, has been trying to sell the wireless carrier for years, and T-Mobile's aggressive pricing has always looked in part like a ploy to grow its subscription base to make itself more attractive to potential acquirers. If Deutsche Telekom were finally able to sell T-Mobile, its new parent might get stingier with pricing and pizzas. If not, its current parent might do the same.
"The question is always the economics in the long term,” Deutsche Telekom CEO Tim Hoettges told Recode in 2015. "You have to earn your money back at one point in time."
AT&T considered buying T-Mobile in 2011 but backed out when regulators signaled that they would block the deal. Deutsche Telekom then tried to sell T-Mobile to Sprint in 2014, but regulators weren't having that either. Last year Reuters reported that Deutsche Telekom was holding off on selling T-Mobile until after the Federal Communications Commission's recent spectrum auction---and until the regulatory environment became more friendly for telcos.
That spectrum auction ended last week. And though President Trump expressed some skepticism of AT&T's proposed acquisition of Time Warner, just about everyone in the telecommunications industry agrees that the new administration will be more amenable to mergers. That means Deutsche Telekom could well put T-Mobile back on the market.
Still, things have changed since 2015, when Hoettges cast doubts on the sustainability of T-Mobile's pricing. Verizon and AT&T are losing subscribers and T-Mobile is gaining them. Perhaps more importantly, T-Mobile is in the black now. Deutsche Telekom might not even have any interest in selling T-Mobile now that it's on more stable financial footing.
Of course, if the price is right, Deutsche Telekom may sell anyway, especially as T-Mobile's core phone business becomes just a part of a broader wireless future that includes connected cars and so many other devices. "They’ve been adding fewer phone customers over time as phone subscriber growth in the industry continues to slow," says Jan Dawson, chief analyst at Jackdaw Research.
If T-Mobile does sell, the future of unlimited data likely depends on who buys. "There are a lot of interesting non-carrier entities who could use T-Mobile's expanding customer base and well-run network," says Avi Greengart, a research director at the firm GlobalData. Companies like Comcast, Charter, and Dish, in other words. But given the longstanding interest among T-Mobile's competitors in snapping up the company—and the apparent friendliness of the new administration to mega-mergers—the big four wireless providers could soon become the big three. The good news is that even if that happened, the cable companies could always launch their own wireless services—something Comcast has been talking about for years. But until that happens, four is better than three when it comes to wireless. Unlimited data almost went extinct once. It could happen again.
