What Mobile Market Changes Mean for Carriers, Users

There has been a lot of change in the wireless industry of late. Here’s a look at how different it is now than it was just a few years ago.

One of the more notable changes to the wireless industry has been the outright death of two-year contracts. AT&T, which was the last company to offer two-year contracts, recently eliminated them. Now, all four major wireless carriers ask customers to either pay in full for smartphones or pay off the price of the device in monthly installments. Either way, the two-year, subsidized contract is dead.

At one time, all mobile users had unlimited data plans. Nowadays, just a precious few wireless customers have the luxury of being grandfathered into unlimited data plans. Instead, carriers have moved to tiered data, charging set monthly fees based on the amount of data customers think they’ll consume. It’s a shift that carriers say is actually better for customers.

In an odd turn of events, AT&T announced on Jan. 11 that unlimited data is staging a comeback. But before you get excited, there’s a catch: AT&T says it will offer unlimited data only to new and existing subscribers to DirecTV or AT&T U-Verse. What’s more, the unlimited data plan costs $100 for the first device and $40 for additional handsets.

Wireless carriers are now looking at ways to expand their services. AT&T, for instance, acquired satellite TV provider DirecTV last year in an attempt to develop a better Internet (and cross-selling) infrastructure between the companies. Verizon, meanwhile, has expanded its advertising and online activities with an AOL buy and is rumored to be eyeing a Yahoo core acquisition.

Apple made some waves in the wireless space in 2015, announcing that it would offer its own iPhone upgrade cycle. The move is seen by some as a way for Apple to get customers to buy products directly from the company and not through carriers. More importantly, it gives Apple more control in a market where carriers have felt out of control. Apple is a wildly popular smartphone maker, and carriers have little choice but to play nice or potentially face its wrath.

Switching to another carrier has never been easier. On the hardware side, companies are now developing products that can be easily ported to another network, regardless of whether it’s running on CDMA or GSM. Carriers, meanwhile, are at war, offering a wide array of credits to get customers to switch to their own services. It’s a great time to be a mobile customer.

Say what you will about T-Mobile’s outspoken CEO John Legere, but his Un-Carrier movement has created some major changes in the industry. He has found ways to innovate on carrier contracts, deliver more choice for customers and shake up what was historically a somewhat civil, level marketplace. All the while, Legere has grown T-Mobile’s subscriber base at a rapid clip. T-Mobile might still be small, but the Un-Carrier movement seems to be working.

One of the moves Legere and company made was to offer Binge On, a service that allows customers to watch online video for as long as they want without paying for it in data charges. Like tiered data plans, the move is a reflection on the massive amount of data mobile users are now consuming, but it also highlights net neutrality, how carriers fit into that and what it really means to throttle data. Simply put, Binge On is a single program that encompasses many of the major changes the market has undergone in recent years.

It wasn’t long ago that wireless customers were largely using their devices to make calls and send text messages. Once smartphones became more popular, SMS was all the rage. Now, SMS has taken a backseat to mobile messaging apps, and consumers are increasingly turning to their smartphones and tablets to watch TV shows and movies, and to even play games. The mobile device is now the center of the universe for many tech users.

There are some rumblings afoot that could pose real trouble for wireless carriers. Not only is Apple, as noted earlier, finding ways to inch into the marketplace with its upgrade program, but Google is working on Project Fi to deliver better connectivity than traditional carriers. And spectrum is always up for sale, potentially changing the market’s landscape. Simply put, third parties are a real threat to carriers, and those threats may only grow as time goes on.