Understanding Cellular Data Plans
Selecting cellular data plans can be an overwhelming adventure. There are just so many options out there and cellular companies frequently change their offerings.
Plans come with a lot of fine print, and in particular, the carriers don't necessarily design and market their plans to those seeking a home internet replacement.
This guide is written to help you understand the different types of plans available so that you can make the right choices for your needs.
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Who To Buy Your Plan From
The first confusing point about cellular data plans is all of the available choices. However, it's important to remember there are currently only four major nationwide carriers in the U.S.: Verizon, AT&T, T-Mobile, and Sprint. Most every cellular data plan will run on one of these networks, even if the company selling the plan has a different brand name.
Each of these four major carriers has both postpaid and prepaid direct plan offerings, their own prepaid brands, and official and unofficial resellers.
The carriers tend to give their own postpaid plans the premium access to their networks, with priority decreasing from there. This prioritization can impact things like the speeds you'll receive, roaming partnerships (thus coverage), features and latency.
To put it simply, when all other factors are equal, carrier direct postpaid plans will have the best performance.
Carrier Direct Postpaid Plans
These are the plans you obtain either directly in the carrier's retail stores, through authorized resellers or via carrier's websites - and likely the first ones you'll encounter as you start shopping.
Postpaid means that you pay for your service at the end of your billing month, and the carriers tend to give higher priority and better customer service to these plans.
Because you are paying for service after it's delivered, the carrier will want you to establish an account with them based on your credit record. If you can't pass their credit check, you may be required to put up a deposit.
The credit check requirement also means that if you don't have a U.S. billing address then you probably can't acquire these plans, which means they are probably not an option for most foreign visitors.
Postpaid plans are traditionally associated with contracts, although many options exist to avoid contracts if you're willing to purchase your cellular devices outright or on your own instead of subsidizing or financing them through the carrier.
In general, postpaid plans are going to have the latest and most popular features - like better customer support, mobile hotspot, and other perks. They're also most likely to include domestic and international roaming agreements and will have the fastest speeds on the network. Also important to note is that postpaid plans are usually grandfathered when they are retired.
Of course, these perks come with a price. Postpaid carrier direct plans also tend to be the most expensive plans.
Postpaid carrier direct plans are usually the first preference for those who depend on mobile internet - but they also usually come with lower data bandwith caps, particularly for hotspot and tethered data.
Carrier Direct Prepaid
All of the carriers also offer direct prepaid or pay-as-you-go plans that allow customers to only pay for service when they need it, rather than making long-term commitments. This makes setting up service easy without any contracts, going through credit checks or giving up your personal information.
Although, these days, most carriers add incentives for automatic monthly payments by setting up an account with them - making the plans less 'pay-as-you-go' and less anonymous.
These plans are usually offered on the carrier's website, through corporate stores or via authorized resellers and are branded as the carrier's prepaid service (ie. Verizon Prepaid, AT&T Prepaid, etc.).
The plans usually cost less than their postpaid equivalents, but lack some of the features or come with additional restrictions. For example, they might be subject to de-prioritized service, more aggressive mobile hotspot caps & restrictions, lack of domestic roaming, less international support and more.
Prepaid Brands, MVNOs & Resellers
Moving beyond plans available directly from the carrier, there are dozens of alternative options available on the mobile market. These options tend to be month-to-month (no contract), don't require credit checks, and may not always be officially authorized by the carriers.
Some of these options are also more easily available to non-U.S. residents who are traveling within the US.
There is a huge diversity of choices and it can quickly become overwhelming and confusing to navigate options. Here at the Mobile Internet Resource Center, we focus on options that offer at least 10GB of mobile hotspot data.
Alternative cellular plan options tend to be classified into three categories - but the lines can get quite blurred:
Each carrier has their own independent prepaid brands that they utilize to target niche markets.
For example, AT&T owns Cricket, Verizon owns Visible, T-Mobile owns Metro by T-Mobile and Sprint owns BoostMobile. You acquire these plans at branded storefronts (i.e. you can't go to an AT&T store to get a Cricket plan).
The plans will often mimic the carrier-direct prepaid options or might offer slightly different benefits and restrictions. These plans will also tend to be slightly deprioritized over carrier direct prepaid traffic and may be missing other features.
MVNOs - Mobile Virtual Network Operators
MVNOs buy service in bulk from the major carriers and resell it under their own brands with their own terms and provide their own customer service. These "virtual" carriers usually directly negotiate and operate under authorized contracts with one or more major carriers to resell service.
The advantage of MVNO plans is there are a lot more options and you can often get better deals and higher usage caps than you can by buying direct from carrier.
MVNOs are usually not allowed to advertise who is providing the underlying network, but if you explicitly ask or do some online digging, it isn’t hard to figure out which data network is behind any given plan (resources: MVNO’s on Wikipedia & BestMVNO).
Some MVNOs use color codes to signal which network the plan is on - Red for Verizon, Blue for AT&T, Pink for T-Mobile and Yellow for Sprint.
Some examples of MVNOs include StraightTalk, Consumer Cellular, Project Fi and FreedomPop. None of these companies are owned by the carriers themselves. They are operated completely independently.
Proceed with caution when dealing with an MVNO. We do not recommend porting a familiar phone number, or phone number you personally identify with, into an MVNO. MVNOs provide a risk to numbers you want to keep when testing out various services that are not direct carrier.
These are companies that have acquired lines of service from the major carriers and are reselling services, typically as rental or leased options. Unlike MVNOs who tend to have a specific agreement with the carriers to resell services, resellers don't always have explicit arrangements. They do not repackage the plans - but resell them as is, with the carrier's terms of service intact.
These may be legit, or could be operating in legal grey areas. They could be reselling lines specifically against a carrier's terms of service, or going through master agents who do have legit business agreements with the carriers.
It can be hard to tell, and the reseller isn't likely to be upfront either way.
This uncertainty means there is a lot more volatility and churn in the reseller market than other markets as options come and go.
Always proceed with caution when dealing with a reseller - anticipate your plan could go away with little to no notice. You could be left with gear that isn't viable for other use later. Your device the plan is used in could get blacklisted by the carrier. You could lose prepaid service. You could experience poor or variable customer service.
If you choose to utilize a reseller provided plan, always have a back-up option in mind for when - not if - your plan suddenly disappears.
Understanding Unlimited Data Plan Restrictions
Unlimited cellular high-speed data plans are in high demand for the mobile community who would like to affordably use hundreds of GBs of data a month.
While all of the carriers proudly advertise unlimited data plans, they have redefined the term “unlimited” to try to find balance between capacity and consumer desire.
These days 'unlimited' basically just means no automatic overage charges.
Unfortunately, that means "unlimited" plans come with limitations and gotchas.
Understanding these restrictions is the key to determining if an unlimited data plan will meet your needs, especially if you're seeking a home internet replacement on the road.
The most typical restriction on unlimited plans is the practice of slowing down speeds delivered - either always, or after a specific point of usage. Sometimes, unlimited high-speed data is only provided for certain activities.
Throttling vs Network Management
Slowing down speeds can get a bit confusing. Don't let terms like Throttling and Network Management trip you up.
Is when a carrier or reseller always slows down speeds. This might be for the entire month, after a certain amount of data is used, or on a certain function or activity. Here are some examples:
- Visible, a Verizon prepaid brand, caps data speeds at a max of 5 Mbps on mobile hotspot usage.
- An FMCA plan offers 25GB of Verizon based data, but after 25GB is used, all data is slowed to (reportedly unusable) 2G speeds.
Is when a carrier deprioritizes network traffic compared to other data.
Generally, a cellular plan will have a certain amount of regular, normal-priority data before deprioritization (aka "network management") kicks in. This is called the network management threshold and varies from 22-100GB of usage in a month. All data use over the threshold is deprioritized.
Some plans are always subject to network management meaning their data is always deprioritized.
Some carriers may refer to the data before a network management threshold as 'premium data'.
Once data is subject to network management, when you're on a cellular tower that is experiencing congestion, data speeds might be slowed down. Once the tower is no longer congested, full speeds should resume. This is because the tower is preferencing higher-priority data.
Depending on the level of tower congestion, you might not even notice it, especially if you travel in non-congested areas. But on a very congested tower network managed data can slow to a crawl. This is frequently seen in congested areas, such as snowbird hotspots during winter months like Quartzite, Yuma or Clermont - and it may feel especially painful.
Network Management is Like the Carpool Lane at Rush Hour
Think of it as if you were driving on a highway that has a high occupancy / car pool lane. During normal traffic, all lanes are at full speed because there's not much traffic.
But during rush hour, if you qualify to use the car pool lane, it's beneficial to avoid the bumper to bumper traffic in the 'normal lanes.'
Network management is like this - after you hit your threshold, you can no longer use the carpool lane. That will only matter during rush hour.
Mobile Hotspot / Tethering Restrictions
The hotspot capability on carrier direct unlimited plans assumes you have a primary internet provider for most things - such as cable or DSL at home or the office.
The carriers do not want their customers using these plans to replace those sorts of connections - which is unfortunately precisely what many nomads need.
Cellular data is often a primary internet source for nomads when used via a feature called mobile hotspot. Mobile hotspot allows our laptops, streaming devices and other gadgets to get online via the data from a device with a data plan.
What is mobile hotspot and tethering?
- Personal Mobile Hotspot is using a smartphone or tablet's cellular connection as a modem to get other devices (like laptops, tablets or streaming devices) online by creating a WiFi hotspot from the smartphone or tablet device.
- Tethering is the same thing, but using a USB cable to directly attach the phone/tablet to a computer or router.
Both activities are treated the same by the carriers in terms of how data is categorized.
Many smartphone & tablet unlimited data plans limit how much data can be used for hotspotting at high speed before being slowed down to nearly unusable speeds.
Some smartphone & tablet plans don't include any high-speed hotspot data or any hotspot usage at all.
The good news is, there are 'alternative' unlimited data plans without these restrictions that we track, which you can learn more about in our Unlimited Data Plan Directory.
Streaming video over the internet has become one of the most data intensive things people do on the internet. The carriers have been trying to capitalize on that demand while managing their resources.
Did you know that one hour of streaming HD video can consume 3-4 GB of data? That's a lot of data!
Most unlimited plans these days include unlimited video streaming on your smartphone or tablet. However, video resolution might be restricted to 480p, 720p or 1080p to save the carrier and/or the customer on bandwidth.
Check out our guide to TV & Entertainment on the Road for a lot more details on utilizing cellular data for video streaming, including the best practices for legitimately getting around your mobile hotspot cap to view video on a larger TV screen.
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Network Management Deep Dive
A more detailed look at how network management works, how carriers prioritize data, and manage their networks.
Downsides of Reseller Plans
While resellers and MVNO can net you better terms and pricing than direct with the carrier - they do come with some considerations.
Data Plan Types
This section goes over unlimited, tiered, data only and connected car plans
Understand the features of your plan. This section goes over hotspot versus on device data, roaming and video services.
Tips for Comparing Plans
When shopping for plans, there are multiple factors you should use to compare them - from coverage, costs and discounts.
Should you pursue a contract or avoid them?
This section shares a lot of tips and tricks for reaching the right people to get the service you need.
Grandfathered & Retired Plans
What happens when a carrier discontinues a plan you love? Do you get to keep it forever?
Terms of Service Considerations
This section goes over some of the common terms of service that consumers either knowingly or ignorantly violate to use their data plan how they desire.
Assembling a GREAT Cellular Data Plan Arsenal
Assembling a great setup usually requires multiple plans, and occasionally switching things up. This section goes over how to best do this.
Conclusion: Know the Details Before Deciding
When purchasing a new data plan, make sure you understand the differences between the different types of options in order to get one best suited to your needs. Choosing a prepaid or data reseller can be cheaper, but can also come with restrctions, such as limits of data, throttling, and mobile hotspot restrictions. Also make sure you understand how each plan defines "unlimited" as those plans often come with limitations.
Selecting the right cellular data plan for your mobile internet needs is only one part of the equation. Here's some further guides on understanding the selection process as well as the additional gear you might need.
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