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Unlimited data plans: 3 things you need to know

What are the common pitfalls on unlimited data plans? How do you know if it's the right deal for you? Here's 3 things you need to know about unlimited data plans

08 June 2017Andre Spiteri 3 min read

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According to Deloitte’s 2016 Mobile Consumer Survey, the average Brit uses less than half their monthly data allowance. And yet, despite this statistic, unlimited - also known as all-you-can-eat - data plans are as popular as ever.

We want to demystify what “unlimited” really means and whether unlimited data plans are really all they’re cracked up to be.

1. Unlimited data plans aren’t always the best deal

Using the Internet as much as you like without having to worry about maxing out your data allowances sounds great. But do you actually need an unlimited allowance?

Mobile contracts with unlimited data are typically at the more expensive end of the spectrum. At the same time, many network providers have a range of cheaper plans with fairly large monthly data allowances (allowances of 3GB and up aren’t unheard of).

At the risk of stating the obvious, an unlimited plan is only worth the expense if your monthly usage consistently exceeds the amount of data available on a cheaper plan. Otherwise, you’re just paying extra money for data you don’t use and don’t need.

You can find out how much data you actually use each month by logging on to your network provider’s customer portal or via their mobile app.

2. You may run into tethering issues

Tethering means turning your mobile device into a personal hotspot and connecting other devices to it so they can connect to the mobile data. While your mobile data usage itself may not be heavy enough to justify an unlimited plan, some people want them for this specific reason.

Tethering can be really convenient if you want to use your laptop - because you’re working remotely, for instance - but cannot find a reliable WiFi connection. The flipside is that it can use up data surprisingly quickly, even if you’re not doing anything particularly bandwidth-heavy such as streaming.

Laptops have a lot more processing power than mobile devices so they use up a lot more bandwidth. This isn’t that much of a problem for network providers when you’re on a data plan with a set limit. But it can really mess with their service if you’re on an unlimited plan and you go overboard with your usage.

Internet connections are typically shared between multiple users simultaneously. So, having one user who’s taking up a lot more bandwidth than the rest, puts a strain on the network provider’s resources. It can then result in a slow or choppy connection for other users.

For this reason, unlimited data plans can have tethering restrictions you wouldn’t find on plans with a limited data allowance. Many network providers cap the amount of data you can use when tethering, despite the unlimited plan. And some won’t allow it at all unless you buy an add-on.

But tethering aside, unlimited data plans may also have other restrictions.

3. Unlimited data plans aren’t always truly unlimited

Despite what the name suggests, unlimited data isn’t necessarily unlimited. Most network providers place restrictions on data usage, even on unlimited plans.

Again, having one user taking up a disproportionate amount of bandwidth can affect other users’ experience. Placing restrictions helps to keep the connection stable and reasonably fast for everyone.

Most unlimited data plans will have a fair usage policy to help set out some restrictions on your use of data. This usually takes one of two forms: 1) speed throttling; or 2) traffic management. However, many network providers apply both.

Speed Throttling

Speed throttling is when your provider intentionally slows down your internet connection.

Typically, network providers will slow down your connection speed if your data usage exceeds a pre-set limit each month. Some networks may also automatically apply speed throttling whenever you use your data allowance for specific things, such as streaming Netflix or live video on your phone.

Technically, it’ll still be possible to access the internet, even if your speed has been throttled. So, strictly speaking, your data plan is still unlimited. However, speed throttling can make your connection so slow that it’s practically unusable.

Traffic management

Network providers use this to influence the way their users make use of their data. It means they prioritise certain types of internet traffic over others depending on the time of day. So you might find your video streaming experience to be much better in the afternoons, for instance, than it is during rush hour or in the evening.

Traffic management usually distinguishes between “peak” and “off-peak” usage times.

During peak times, there are typically more users on the network. So, your network provider will restrict certain types of traffic, and prioritise others, in order to make the connection faster and more stable for everyone.

During off-peak times, on the other hand, there are less users online. This means your network provider can afford to let more people undertake bandwidth-heavy activities (like streaming) at greater speeds.

So now you know what an unlimited data plan really means, you can decide whether or not it’s worth it for you.

Andre Spiteri Image

Written by Andre Spiteri

Financial Writer

Andre is a former lawyer turned award-winning finance writer.