A New Approach to Unlimited Data Plans

It’s become increasingly difficult to stand out in the mobile market, but the launch of a new concept from US-based Noble Mobile — which offers only one unlimited data plan — caught my eye. As absurd as it may seem, the provider is rewarding people for using their phone less.

Taking a step back, it’s important to consider why unlimited data plans are becoming increasingly common. In our survey of consumers in the UK, Germany, Spain and the US, the majority of respondents said they’re interested in unlimited data plans (see below). Our research has found that people are attracted by the reassurance of never running out of data. Value for money is also an important factor.

This demand comes with some risk for mobile service providers. Customers could feel dissatisfied about paying for something they may not fully use and move to a cheaper rival or switch to a limited, but less expensive, plan.

Noble Mobile aims to address this risk directly. The company was launched by Andrew Yang, who was a candidate in the 2022 Democratic Party presidential primaries. It claims to offer good value regardless of how much a customer uses their plan.

The MVNO uses T-Mobile’s network and has one plan, priced at $50 a month for unlimited data. But it claims to do something that no mobile service provider has done before: pay people for using their phone less.

For every 1 GB of mobile data a user doesn’t use under 20 GB in a month, the company will pay them $1. So, if you use 15 GB in a month, you’ll receive a $5 reward. The money is invested in an account that pays 5.5% annual interest, but customers can withdraw it at any time or use it toward their monthly bill. The company recommends that users keep rewards in their account to encourage saving and reap the benefits of compound interest.

This strategy aims to ease concerns about value for money. If users aren’t using their unlimited plan, they’ll receive a cash bonus and still have the comfort of unlimited data. It also reframes the narrative from “wasting” data to being rewarded for using your phone less.

I’m optimistic about this strategy, particularly as many of us know we spend too much time on our phones. This offers an attractive incentive to pursue and stick to a “digital detox”. However, I see some hurdles.

Firstly, the messaging of “earning money” is slightly misleading. The highest amount available is $20, or 40% of the $50 monthly contract cost. The deal should be seen as an airtime plan and a savings strategy. Interestingly, this combination may have legs given the interest by several fintech brands in becoming MVNOs (see Lendable Leads Fintech into UK Mobile Market).

Secondly, the plan shouldn’t be seen as a bargain. Unlimited deals are available in the US from brands such as Mint Mobile and Boost Mobile for $30 a month. However, Noble Mobile’s package costs less than most carriers’ unlimited data offerings, which is the segment of the market the MVNO is targeting.

Thirdly, Noble Mobile’s bring-your-own-device policy could be a sticking point, as adoption of SIM-only deals in the US has been slow compared with Europe.

Rather than lowering its prices to compete with other MVNOs, Noble Mobile should continue to build its brand by promoting reduced phone use, providing customers peace of mind through unlimited data and helping them grow their savings.

This could appeal to Americans in particular: the household savings rate in the US has been declining for decades, and demand for mobile data continues to grow. As our survey revealed, almost 90% of US respondents would consider an unlimited plan next time they renew or upgrade, and 47% told us they already take the all-you-can-eat option.

In my view, a savings incentive alongside an unlimited data plan could have a modest impact in the US. However, the approach could be more popular in European markets, where SIM-only packages are increasingly chosen. Financial companies could be particularly well-positioned to capitalize on this new type of unlimited data plan. We’ll continue to monitor this trend and Noble Mobile’s progress.