As analysts, investors, and executives in the telecom business debate the growing impact of unlimited data plans, one winner is becoming increasingly obvious: consumers.
A day after Verizon introduced its first unlimited data plan in over five years, T-Mobile said it was enhancing its unlimited plan, unveiled last summer, and cutting prices.
The original low price T-Mobile (TMUS) unlimited plan, introduced in August and known as T-Mobile One, downgraded all streaming video to phones from high-definition to DVD quality. Higher quality video streaming was available for a higher price, $3 per day or $15 per month. On Monday, CEO John Legere announced on Twitter that T-Mobile would stop downgrading video and give all its unlimited users HD video for no extra charge.
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Also, the plan had previously limited sharing data from a phone with other devices like a tablet via Wi-fi tethering to slower speeds of up to 512 kilobits per second. Unlimited high speed tethering was available on a plan that cost an extra $25 per month. But Legere said T-Mobile would now match Verizon’s deal of 10 GB per month of full LTE speed tethered data.
T-Mobile’s plan still starts at $70, $10 less than Verizon’s plan, and eliminated added fees and taxes in January, which can boost the final price to a Verizon customer by 10% or more. But T-Mobile cut the price of a two-line plan to $100 from $120. Verizon (VZ) charges $140 plus taxes and fees for two lines. Sprint (S) this week slashed its unlimited price to just $90 for up to five lines for a year. So far, AT&T (T) has not changed the price of its unlimited plan, which starts at $100 and is only available to customers who also subscribe to its DirecTV service.
Despite all the new customer-friendly competition, the return of unlimited plans could hurt users in the end, if all of the recent moves lead to excessive network congestion. T-Mobile, Verizon, and other carriers have been adding new technology and more cell phone sites to improve efficiency and capacity in their networks. But with consumers watching ever-more streaming video on the new plans, analysts aren’t sure whether the upgrades will be enough.