Is it time to ditch Verizon’s unlimited data plan?

As the company hikes the price of its grandfathered unlimited plan, CNET’s Marguerite Reardon helps a customer figure out his options.

A price hike on Verizon’s unlimited data service may be the last straw for customers clinging to their grandfathered plans.

The company said earlier this month that after November 15, it’sbumping up the price of its unlimited data plan by $20, bringing the cost to $50 a month. With text messaging and voice services figured in, a customer’s bill could easily top $100 a month.

Verizon’s price hike is the latest in a series of moves the carrier has made to encourage grandfathered customers to ditch unlimited plans and switch to its tiered offerings, which cap how many videos and songs a customer can download or stream to a smartphone. It’s also an indication of the growing cost of delivering data services to consumers. The bottom line? Good deals on data are tough to find.

In this edition of Ask Maggie, I let a Verizon customer on an unlimited data plan know what his choices are.

Dear Maggie,

I’m a grandfathered unlimited data plan customer with Verizon. With the company’s price hike for this service just around the corner, I’m exploring my options. My data usage is usually around 10GB to 12GB per month. Should I hang on to Verizon’s unlimited service, switch to one of Verizon’s tiered plans, or drop Verizon altogether for Sprint or T-Mobile and hope for the best?

Thanks,
Joshua P.

Dear Joshua,

Starting next month, you and the few remaining Verizon customers still subscribed to unlimited data plans will be forced to pay a lot more for wireless service.

For most of these customers, unlimited data plans are overkill, since the average consumer uses only about 3GB of data a month. But for a small group of customers who need 10GB or more, sticking with an unlimited plan could be a better option.

Plans compared

Verizon recently rejiggered its monthly data plans. It now offers five sizes: small, medium, large, extra large and extra-extra large. Given your usage habits, you’d need an XL plan, which offers 12GB of data for $80. Once you add in the $20 cost of connecting a smartphone to the plan, your monthly service would cost $100 a month. This is comparable to what you’d pay under Verizon’s new pricing for your unlimited plan. But because the unlimited plan gives you wiggle room if your data needs increase, I’d recommend sticking with it. That’s assuming Verizon is the only service available to you.

Another option is to leave Verizon and switch to either Sprint or T-Mobile, which still offer unlimited data plans to new subscribers. Before you cut ties with Verizon, make sure either Sprint or T-Mobile offers service where you live, work and travel. Network coverage from these carriers has traditionally been better in cities than in suburban and rural areas.

The best way to know if the service will work for you is to try it. T-Mobile offers a weeklong free trial, and Sprint has a 14-day guarantee. You could also consult with friends who are Sprint or T-Mobile subscribers, perhaps even inviting them over so you can test the coverage.

The plans are competitively priced. Sprint last month increased the cost of its unlimited data service by $10, but at $70 a month, it’s still the most affordable. T-Mobile’s unlimited data service is $80 a month.

However, T-Mobile’s unlimited plan offers the better value if you plan to use your smartphone to create a mobile hotspot, which shares your cellular data connection with other devices via Wi-Fi. Included in T-Mobile’s monthly plan is up to 7GB of mobile hotspot usage.

Sprint’s service includes only 3GB of hotspot usage. Each additional gigabyte costs $15 a month, so it would run you $130 to get the amount T-Mobile offers. Verizon’s unlimited data plan prohibits turning your smartphone into a mobile hotspot.

The take-away

Under Verizon’s tiered offerings, a typical customer, averaging 3GB monthly, would pay a total of $65 a month. That’s a significant savings over the $100 they’d pay under the unlimited data plan.

But you’re not a typical customer. Your data usage is high enough to warrant an unlimited plan. There’s no question you’d get a better deal from Sprint or T-Mobile, but you need to see if those carriers work for you.

In spite of all this, one thing is clear: The days of the unlimited data plan are numbered. Verizon, which stopped offering unlimited data to new customers in 2011, continues to make it difficult for its grandfathered subscribers. Sprint and T-Mobile are also succumbing to the economic pressures of offering unlimited data services. Both companies now slow down connections for customers who use more than 23GB of data per month.

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