What do unlimited calling plans really offer businesses?

How to know if unlimited calling is right for you

Verizon's announcement last week that it was launching a flat-rate wireless plan that would allow for unlimited calling had a cascading effect on the telecom industry, as AT&T and T-Mobile soon followed suit with flat-rate wireless calling plans of their own.

In the wake of these new plans, some analysts have speculated that carriers have started offering them to attract new business customers. With more businesses requiring more mobility from their employees, they note, adopting an unlimited calling plan might be a good way to meet their workers' needs without having to worry about overage or roaming charges.

"If you think about people in the transportation business or people who do business nationwide, it makes a lot of sense for them in terms of simplifying their payment structure," says Dan Shey of ABI Research, who also thinks that carriers will try to use flat-rate plans to wean business customers off of their traditional landline services. "If carriers can provide voice calling and messaging all in one, then that has benefits of mobility. And if it's reasonable from a cost perspective, it's going to have impact on the landline business."

Of course, flat-rate plans won't be right for every business. All three of the carriers' flat-rate plans start at $99.99 per month per user, with additional rates charged for various levels of text message, e-mail and Internet usage. Gartner analyst Tole Hart estimates that the current flat rates will only be attractive to high-end users who use more than 2,000 minutes of wireless services per month.

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Verizon's announcement last week that it was launching a flat-rate wireless plan that would allow for unlimited calling had a cascading effect on the telecom industry, as AT&T and T-Mobile soon followed suit with flat-rate wireless calling plans of their own.

In the wake of these new plans, some analysts have speculated that carriers have started offering them to attract new business customers. With more businesses requiring more mobility from their employees, they note, adopting an unlimited calling plan might be a good way to meet their workers' needs without having to worry about overage or roaming charges.

"If you think about people in the transportation business or people who do business nationwide, it makes a lot of sense for them in terms of simplifying their payment structure," says Dan Shey of ABI Research, who also thinks that carriers will try to use flat-rate plans to wean business customers off of their traditional landline services. "If carriers can provide voice calling and messaging all in one, then that has benefits of mobility. And if it's reasonable from a cost perspective, it's going to have impact on the landline business."

Of course, flat-rate plans won't be right for every business. All three of the carriers' flat-rate plans start at $99.99 per month per user, with additional rates charged for various levels of text message, e-mail and Internet usage. Gartner analyst Tole Hart estimates that the current flat rates will only be attractive to high-end users who use more than 2,000 minutes of wireless services per month.

Similarly, telecom analyst Jeff Kagan says the decision to switch over to a flat-rate plan may simply hinge on whether a customer spends more or less than $100 a month per user on wireless telecom expenses. Obviously, Kagan notes, it makes all the sense in the world for a business that spends $150 monthly per user to get a flat-rate plan, while a business that spends $60 monthly per user would be better off sticking with its current plan.

However, it's possible that competitive pricing could drive down flat-rate wireless plan prices in the long run and thus make them more palatable for businesses. After all, the companies' flat-rate wireless announcements came little more than a week after Sprint CEO Dan Hesse told USA Today that his company was looking at offering its own national unlimited calling plan as a way to set Sprint apart from its competitors. If Sprint still wanted to make a splash in the market, Kagan says, it could come out with its own flat-rate plan that charges $10 less per month than those of its competitors.