Thanks to the explosion of streaming services, social media, and a boon in interactive mobile experiences, there has been a rapid evolution in the way that today’s consumers engage with content on their mobile devices. With one-third of consumers checking their phones the moment their alarm goes off in the morning, and 20 percent saying they check their mobile device more than 50 times a day, smartphone usage is at an all-time high with no signs of slowing down. However, the endless streams of content are guzzling an inordinate amount of mobile data, often resulting in hefty monthly bills for the consumer.

In 2017, competition for subscribers, the growing consumer demand for more mobile content, and the persistence of data-heavy apps ignited an unprecedented unlimited data price war among the major U.S. mobile carriers. In the coming year, unlimited data plans will plateau, while carriers make them more restrictive as they grapple with network congestion. The restrictions will generate consumer backlash. The wireless industry will be forced to contend with network capacity and quality-of-service issues, leaving consumers – even those with unlimited data plans – with degraded video quality, erratic streaming speeds, and throttled content unless they are willing to pay higher tariffs.

2018 will surface frustrated mobile consumers who will be more confused than ever around the alleged benefits of presumed “unlimited” data plans.

Consumers want more data, and they want it now

Mobile data usage has surged in recent years, with wireless users in the U.S. expected to consume more than six gigabytes of data per month in early 2018, up from an average of four gigabytes just last year (according to Chetan Sharma Consulting). Consumers have become increasingly reliant upon data-heavy apps to enjoy music and video streaming, but find themselves habitually exceeding their allotted monthly data limits. In fact, more than half of consumers occasionally go over their data plan allowance, with 25 percent exceeding it often, according to Deloitte’s 2017 Global Mobile Consumer Survey.

As usage continues to climb, consumers have been forced to push the limits of their data plans – whether by paying up to an unlimited plan, purchasing a higher tier, or stifling their mobile usage – and are demanding more personalized, cost-effective options to fulfill their mobile needs and preferences. Based on the ongoing friction between consumer demand and carrier capabilities, 2017 marked a major turning point in the shift to a more content-centric industry landscape.

A new identity for the wireless industry

To meet the needs of content-hungry subscribers and maintain market share, all four of the major U.S. carriers now offer unlimited data plans. What’s more, the growth (and acquisition) of over-the-top (OTT) content services give each of these players a unique set of differentiators in a highly competitive market.

As the unlimited data war heated up and consumer behaviors became progressively more content-centric, several years of unprecedented marriages between telecom giants and content companies have ensued to address consumer demands and to maintain revenues. In 2016, the telecom industry spent $224 billion on M&A, which represented an increase of 137 percent over the prior year. These investments are only expected to rise. The M&A activity and consumer demand in 2017 were harbingers of massive opportunity for new strategic identity among wireless players – transforming the traditional, lethargic carriers to entertainment companies and major mainstream content brands. The proposed (and later stalled) acquisition of Time Warner by AT&T, and ongoing talks between carriers and content companies suggest the M&A environment has become even more competitive in the race to differentiate commodity services such as data delivery and win over content-hungry consumers with unique and monetizable assets. The mergers between carriers and content owners are also directly fueling the increasing trend of consumers to seek out entertainment content and apps that subsequently burn through data plans.

Pulling back the “unlimited” curtain in 2018

The spread of unlimited data plans shows no signs of abating; however, the overwhelming utilization of mobile networks and resulting congestion will force the hand of carriers to adjust road blocks and impede truly unlimited access. With this in mind, what will “unlimited” data plans really look like in 2018?

Based on the transformation of the carrier landscape in 2017, including the wave of carrier and content consolidation, the wireless industry will be faced with inefficient, overcrowded and overextended networks and infrastructure. To maintain the quality of services and retain customers while preserving profit margins, carriers will incorporate more fine print into contracts to implement additional limits on “unlimited” plans. As a direct result, consumers in 2018 will be faced with degraded video quality, diminished streaming speeds, and throttled content. Unlimited plans with caveats will also fuel the recently popularized trend of releasing add-on or higher tier options on top of unlimited plans for higher quality of service. With the recent dismantlement of net neutrality regulation, the door is open to paid access for fast lanes.

While consumers continue to favor all-you-can-eat data plans, the competitive pressures on the unlimited data plan providers will inflame confusion around what it means to have truly unlimited access to popular apps, streaming services and OTT content. This carrier-consumer friction will also leave meaningful opportunities for smaller, more nimble technology players to introduce innovative new models to bridge the limitations of the unlimited gap, and ultimately give consumers the full-fledged mobile experience they have been seeking.

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