For generations, telephone companies have billed calls individually, taking into account both the geographical distance between those talking and the length of the call. But with the wireless phone industry selling plans with unlimited access, customers have become used to flexible plans and have started to demand them from their land-line providers.
For phone companies, bundled plans create a predictable revenue flow and decrease the paperwork involved in separate billing systems and itemized phone bills. The plans have not been around long enough to show how they affect the churn rate, the percentage of a company’s clients who leave for a competitor during a given period. Still, managers of most companies think that customers who buy these packages are more loyal.
New customer habits also make selling unlimited plans easier. Consumers have become accustomed to paying a flat fee for other services like cable television, regardless of whether they watch it 3 or 30 hours a week.