What has been the impact of the unlimited data plans now offered by all four major U.S. mobile network providers? The single biggest change is that T-Mobile US Inc. (NYSE: TMUS) has taken over the top spot from larger rival Verizon Communications Inc. (NYSE: VZ) on all six metrics tracked by network monitoring firm OpenSignal.

The results of research published this week by OpenSignal shows that network speeds on both AT&T Inc. (NYSE: T) and Verizon networks have “clearly dropped, almost certainly a result of new unlimited customers ramping up their usage.” At T-Mobile and Sprint Corp. (NYSE: S), however, overall network speed steadily increased.

T-Mobile and Sprint have offered unlimited data plans since last year, and AT&T and Verizon added unlimited data plans earlier this past February. The impact on network speeds at AT&T and Verizon was marked. In the first six months of 2017, Verizon’s 4G download speed dropped from 16.9 megabits per second (Mbps) to 14.9 Mbps, while AT&T’s speed dropped from 13.9 Mbps to 12.9 Mbps.

OpenSignal offers an app for mobile customers to download that, among other things, reports data on network availability and speed every time the customer uses the phone. The OpenSignal app sampled more than 5 billion U.S. network connections in the three-month period from April 1 to June 30, 2017.

In addition to measuring 4G download speed, OpenSignal also measures 3G download speed, overall download speed, 3G and 4G latency, and 4G availability. On all six measures, T-Mobile ranked first.

Two especially interesting observations from the research were the continuing battle between T-Mobile and Verizon for dominance in U.S. urban areas and how the mobile carriers are dealing with the network congestion caused by unlimited data plans.

In OpenSignal’s analyses of 4G speed and availability in 32 U.S. cities, either T-Mobile or Verizon ranked highest or tied for first in all 32 cities. The report noted:

In our national metrics T-Mobile may have the awards, but Verizon is clearly going head to head with T-Mobile in the big cities and in many cases gaining the upper hand.

Regarding network congestion and unlimited data plans, OpenSignal adds a note of caution:

We certainly don’t expect either operator to let up in the coming year. Verizon has encountered a setback with the introduction of unlimited plans last spring, but ultimately the shift away from tiered data to unlimited data could have a lasting impact on all operators. The more demand created for data, the more network resources get taxed. Unless operators make up the difference by adding more capacity, data speeds will slow for everyone. Right now T-Mobile and Sprint benefit from their smaller size. Verizon and AT&T have twice the number of subscribers of their smaller competitors, which means they have twice as many devices competing for limited capacity. But T-Mobile is growing rapidly, and it continues to push all of its postpaid customers toward unlimited plans. If operators keep opening the data spigot wider, falling speeds could become a problem for the entire U.S. mobile industry, not just Verizon and AT&T.

The full report and methodology are available at the OpenSignal website. You can also download a mobile app at the website that will allow you to participate in the research.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.