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data plan (mobile data plan)

Contributor(s): Matthew Haughn

A data plan is an agreement between a mobile carrier and a customer that specifies how much mobile data the user can access, usually per month, for a specific fee.

Since the advent of the smartphone, most mobile service providers offer data plans at  varying rates based on the amount of data transfer allowed before a data cap is imposed. Some data plans include voice, text messaging and data while others are broken into separate charges, one for phone and text and another for data. Some mobile users opt to forgo data and make do with Wi-Fi for Internet access. However, a data plan enables access in areas outside of the range of available  Wi-Fi networks.

Data plans are often considered to be more expensive than they should be, and they tend to cost more in the United States than elsewhere. Unless there are protective mechanisms in place, such as alterting users when they have reached the limits of their data caps or automatically turning data off when that limit is reached, people can often  go significantly over without realizing it. A single hour of streaming Netflix content, for example, uses up to 3 gigabytes of data. Horror stories of customers shocked to receive bills well over $1000 are not uncommon.

Default  settings can catch also catch many users with new smartphones unaware.  A phone’s default setting might be, for example, to switch to mobile data automatically when the device moves out of Wi-Fi range or to use mobile data in conjunction with Wi-Fi for more bandwidth. A user’s failure to switch the phone to Wi-Fi when it’s available can also result in unexpectedly high mobile bills.

This was last updated in June 2016

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