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T-Mobile and Sprint’s new unlimited plans aren’t exactly unlimited

Rob Pegoraro
·Contributing Editor
T-Mobile's CEO John Legere

Sprint and T-Mobile want to sell you unlimited data for less. But don’t start celebrating just yet.

Getting more data at a lower price should be good. But wireless broadband differs from wired broadband in one key way: scarcity. It’s hard to provide reliable wireless service if everyone is maxing out their connections at once.

That’s why Sprint (S) and T-Mobile (TMUS) each have to take a chisel to their definitions of “unlimited.”

What you lose at T-Mobile: tethering, HD video

The chisel in T-Mobile’s hands is arguably bigger than Sprint’s, though. To replace the company’s $95 unlimited plan with its new $70 per month “T-Mobile One” unlimited deal, which starts Sept. 6, T-Mo had to shackle tethering — the ability to share your phone’s connection with a nearby computer via WiFi.

Instead of the free but data-capped tethering that T-Mobile has provided since it debuted no-contract plans in 2013, T-Mobile One only allows unlimited tethering via its “2G” service, which offers speeds of no more than 236 kilobits per second.

To test that, I set my Android phone to connect to T-Mobile via 2G, tethered my laptop and tried to load Yahoo Finance’s home page. Four and a half minutes later, my MacBook Air’s Chrome browser gave up after loading just seven stories, two thumbnail pictures, some stock quotes and a logo or two.

Faster LTE tethering will cost $15 a month extra for a 5 GB allotment, about a third of the current unlimited plan’s 14 GB tethering allowance.

T-Mobile One also excludes streaming high-definition video from its new plan, instead limiting streaming video to standard definition. This “BingeOn” tradeoff is the default in current plans, and many users must not mind: Only .8% of subscribers opt out of it, T-Mobile Chief Technical Officer Neville Ray said in a conference call Thursday.

But if you do notice the difference, regaining HD streaming will cost $25 a month extra instead of being free.

All this makes “T-Mobile One” look more like “T-Mobile Asterisk.”

The carrier’s “T-Mobile Goes All In on Unlimited” blog post, which features a video of CEO John Legere declaring “the era of the data plan is over,” also implied T-Mo’s current plans will vanish for new customers.

Not so. Half an hour into a call with the press explaining the new plan, Legere clarified that “we’re not going to eliminate our other plans now.” T-Mobile PR confirmed Friday morning that the company’s current $50 per moth 2 GB, $65 per month 6 GB and $80 per month 10 GB plans will remain, as will their tethering allocations, T-Mobile’s Data Stash data rollover service and free BingeOn opt-out.

Sprint’s subtractions aren’t as bad or as clear

The tradeoffs with Sprint’s new $60 per month Unlimited Freedom plan, now available in place of a $75 per month offer, are not as pernicious … maybe.

Unlike T-Mobile, Sprint does include full-speed tethering and allots a reasonable 5 GB for it—up from 3 GB of tethering on the old unlimited plan.

Like T-Mobile, Sprint will “optimize” video at standard definition and says you won’t notice the difference.

Sprint’s unlimited plan will also limit audio streaming to 500 kbps and gaming to 2 Mbps, but it doesn’t say which apps will fall under either cap. A day of back-and-forth correspondence with Sprint PR yielded no further clarity on that point.

Sprint did, however, commit upfront to keeping its earlier plans, so there’s no pressure to take its new sort-of-unlimited offer. These plans, shown under a “See data options” button on Sprint’s price-plans page, start at $40 for 1 GB of high-speed data and run up to $120 for 40 GB, with $50 for 3 GB and $65 for 6 GB being the best fits for most people.

(Those costs include a $20 device-access charge. If you sign up for the two-year contracts Sprint still sells to the financially unwary, add another $25.)

Data is hard for everybody

Sprint and T-Mobile must chip away at the definition of “unlimited” because uncapped wireless use can swamp a fixed amount of wireless spectrum. Verizon (VZ) has no such plan, while the unlimited deal at AT&T (T) requires subscribing to its DirecTV or U-verse TV services and bans tethering.

“Every new network technology makes the provision of bandwidth cheaper,” wrote analyst Jan Dawson of Jackdaw Research in an e-mail. “But no network technology is ever going to make it so cheap that carriers can afford to provide truly unlimited services to the entire base.”

Wired internet access doesn’t impose the same fundamental constraints, although some big providers pushing their own data caps might not want to admit that.

But while unlimited wireless data may remain unfeasible (Dawson remains unconvinced that upcoming “5G” will fix that) and unnecessary (US subscribers averaged 3.2 GB in June, NPD Group analyst Brad Akyuz said), it can appeal to subscribers whose phones obscure how much data they use.

In Apple’s iOS operating system, you have to scroll to the bottom of the cellular-settings screen to see your data use — and this list doesn’t reset each month, leaving you to guess how much data you used on your last bill. No, iOS 10’s beta releases have yet to fix this.

In Google’s Android OS, your data usage is easier to see and gets broken down by month. But Samsung’s modified version of Android requires another tap or two to see these details.

When your own device leaves you guessing about your data use — and the penalty is either steep overage charges or having your connection throttled back to 2G speeds — it’s understandable to buy more than you need. It’s also understandable for carriers to respond by charging you a premium to end that worry. But you need to understand upfront what you trade for the seeming certainty of “unlimited” data.

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Email Rob at rob@robpegoraro.com; follow him on Twitter at @robpegoraro.