Phone plans with unlimited data offer subscribers the ability to use their smartphones without worrying about data overage charges. Unlike plans that charge by the gigabyte and can result in massive fees, these plans ostensibly offer "all you can eat" pricing for wireless data. In reality, however, most wireless companies impose some kind of limit on unlimited data plans, usually by throttling connection speeds.
A typical unlimited data plan allows a subscriber to pull down data at high speeds until he reaches a set limit, often 2 gigabytes in a single month. Once that limit is reached, the carrier reduces speeds to 3G speeds or slower in order to reduce congestion on the network. In addition, some carriers automatically throttle "unlimited" users during heavy traffic periods to ensure connectivity for as many subscribers as possible.
Many carriers also have limitations on their unlimited data services. For instance, many allow standard subscribers to tether wireless devices to their phones or access streaming content but restrict these capabilities for unlimited users. This is done to prevent abuse of the system and reduce the amount of bandwidth used.
In many cases, unlimited data plans are completely unnecessary. According to a study by NPD Connected Intelligence, most smartphone users stay under the 2 gigabyte limit, and very few reach 3 gigabytes of data in a single month.