Telstra has launched the nation’s first genuinely unlimited mobile data plan, stepping up the fierce contest over who gets to provide Australian consumers with mobile internet.

At a whopping $199 a month, Telstra’s new plan is way beyond most people’s needs or price range, and Telstra expects it to attract only a very select customer base. But as far as data packages go, it is by far the most generous plan going.

Vodafone hit back almost immediately, revealing Wednesday morning major overhauls to its mobile plans, though not introducing anything as generous – or expensive – as Telstra’s unlimited package.

Its latest plans let customers tailor their own package depending on what sites and apps they use, providing unlimited data in certain areas such as video streaming, music, social media, and chat (more on this later).

The latest moves step up the fierce battle to offer the most competitive data packages, creating new benchmarks for competitors like Optus, TPG and Amaysim, which will no doubt be discussing the new offers frantically in their boardrooms today.

It follows Optus’s launch of a limited-edition quasi ‘unlimited’ plan in March – the move that started the unlimited war. It also follows TPG’s headline-making free data-only unlimited plan.

The sudden outbreak of such intense competition is hammering the telco companies’ bottom line, and is partly responsible for Telstra’s plummeting share price (the NBN is the other reason). The telco giant can no longer charge huge sums of money for sub-par services.

But while it may not be great for telcos’ share prices, it is excellent news for consumers.

Telstra’s bid for the high-end market

Telstra’s ‘Ultimate’ unlimited plan offers customers unlimited data “at the fastest speeds available to them” on the Telstra network.

At $199 a month, it will be out of most people’s price range – although the price tag does include a handset (you can’t get it on SIM-only plans as yet).

A spokesperson for Telstra told The New Daily the firm expects it to be used only by a select set of customers, such as people who have unusually high data needs, use their phones as internet hotspots, or travel a lot for work.

But alongside the unlimited plan, Telstra also launched what it calls its ‘Peace of Mind’ data package, which gives users unlimited low-speed internet – 1.5Mbps – once they use up their high-speed allowance.

They are, therefore, technically ‘unlimited’, although on 1.5Mbps you can’t do the more demanding things like stream good-quality video. Netflix recommends speeds of 3Mbps for standard definition and 5Mbps for high-definition video.

The plans are also not exactly cheap either – $69 a month for 30GB of high-speed data, or $89 a month for 60GB of data.

Vodafone’s new plans

Vodafone already offers a similar, but slightly better value, plans to Telstra’s ‘Peace of Mind’ package.

The cheapest costs $60 a month and gives you 40GB of high-speed internet. After that, the speed drops to 1.5Mbps. The $80 plan gives you 70GB, and the $100 plan gives you 120GB.

But on Wednesday Vodafone launched a cheaper unlimited alternative, ‘Vodafone Pass’, which applies to the Vodafone Red plans. These cost $35 for 3GB, $45 for 15GB, and $60 for 40GB (with generous bonuses if you sign up before the end of the month – another sign of the fierce competition).

Customers on these plans can add on $5 for unlimited chat, $10 for unlimited social media or music, and $15 for unlimited video (though only at speeds of 5Mbps).

Do we need this much data?

Budget mobile provider Amaysim told The New Daily it had no plans to follow Telstra and Vodafone in offering unlimited data plans, claiming the average Australian didn’t need anything like that much data.

“We currently don’t see a need for unlimited data in the market,” Amaysim commercial director mobile Maik Retzlaff said.

“There is a misconception that people actually use lots and lots of data. Whilst there are some that do, it is the minority. The average amount of data used per month is just over 3GB,” he said.

He said 42 per cent of Australians used just 1GB of data, which he claimed was why Amaysim’s $10-a-month 1GB mobile plan had seen “massive uptake”.

“Unlimited data may sound nice, but why pay for more than you actually need?”

Optus said it currently had no unlimited plans on the market.