Verizon Starts Offering Unlimited Data Plan in the US, T-Mobile Responds

Verizon, in a major reversal, has joined other carriers in offering an unlimited data plan.

As recently as January, Verizon's chief financial officer said unlimited plans were "not something we feel the need to do" even though rivals had made inroads against Verizon by offering them. Verizon stopped offering such plans to new customers in 2012 and has been trying to push longtime customers off those old plans through rate hikes.

The arrival of the iPhone and other smartphones made unlimited plans more of a rarity as carriers saw opportunities to make money by charging customers based on how much data they use.

But Sprint and T-Mobile recognized in unlimited data an opportunity to snare customers from heavyweights Verizon and AT&T. Because carriers must poach each other's customers to grow, the competition has intensified.

AT&T also started offering unlimited plans after discontinuing them, but they are available only to customers who also subscribe to DirecTV, which AT&T owns. Its prices are similar to Verizon's for a family; Verizon is cheaper for an individual.

Verizon's new unlimited plan replaces several higher-data plans and starts at $80 for one person, not counting fees and taxes. (Existing customers can keep their plans.)

For a family of four, unlimited costs $180 (roughly Rs. 12,000) at Verizon. To compare, Sprint just launched a new promotion for new customers that costs $90 a month for four lines, and T-Mobile, which includes taxes and fees in its total price, is $160. AT&T costs $180 for four but also requires a TV subscription.

Verizon is trying to differentiate itself by letting customers watch high-definition video with the unlimited plan, while competitors run streaming video at DVD-level quality.

T-Mobile responded Monday by saying that it would include HD video as well starting on Friday. Before, customers had to pay extra for HD streaming.

T-Mobile also said that, like Verizon, it would offer 10 gigabytes of high-speed data for a mobile hotspot, so that people can connect on laptops or tablets on the go. After that, slower 3G data will be available for a hotspot.

Of course, like all so-called unlimited plans, Verizon's is not really unlimited. If customers use more than 22 gigabytes of data in a month, their speeds may be slowed if the network is busy.