Families looking to meticulously manage their monthly budgets have a major, highly impactful new development to consider today. Verizon announced a $4.8 billion deal to acquire Yahoo's core internet business this week. Sprint highlighted in their investor presentation, Verizon is combining Yahoo with AOL to build a digital advertising behemoth to monetize user data. Realizing that the wireless infrastructure business has plateaued, your carrier now wants to become a massive advertising broker.
The concept of shared data was initially pitched years ago as a way to simplify family billing, but it quickly became a source of intense household anxiety. Now, as the industry pivots aggressively toward 'unlimited' tiers, that anxiety hasn't disappeared; it has merely changed shape. Instead of worrying about massive overage fees at the end of the month, parents are now forced to navigate the complexities of data deprioritization and video resolution throttling.
Device innovation has largely plateaued across the board, meaning the massive upgrade supercycle we saw with the early generation of smartphones is completely over. Because consumers are now comfortably holding onto their phones for three or four years instead of two, carriers can no longer rely on frequent hardware upgrades to trigger contract renewals.
Think of the wireless network exactly like a massive, multi-lane highway. During rush hour, the carrier has to systematically decide who gets to drive in the fast lane and who gets slowed down. The complicated new plans we are seeing are fundamentally about selling expensive VIP passes for that highway, cleverly disguised under the marketing umbrella of 'unlimited data'.
The competitive gap in actual, real-world network performance has narrowed to an almost indistinguishable margin in most urban and suburban areas. Independent testing firms routinely show that the difference between the 'best' network and the 'worst' network is often just a few megabits per second—a difference completely unnoticeable when simply scrolling through social media. Therefore, the battle has shifted entirely from civil engineering to aggressive marketing.
Stepping back to analyze the broader market context, 2016 is proving to be an absolutely defining year for telecom infrastructure. The looming, capital-intensive shadow of 5G deployment is forcing all major carriers to aggressively hoard cash, which inevitably trickles down to impact consumer pricing models. They need billions of dollars for the next-generation hardware rollout, and the absolute easiest place to find that capital is by slightly tweaking the profit margins on current, widely-adopted LTE plans.
So, what does this mean for your bottom line? If you are managing multiple lines, seriously look into prepaid family plans from major network MVNOs. You can very often get the exact identical geographic coverage for half the monthly price, provided you are willing to bring your own devices.
Don't let the artificial pressure of a 'limited-time promotion' force you into a rushed, poorly calculated financial decision. In the telecom industry, there will always be another major deal waiting just around the corner.