Verizon Price Changes Leave Shared Data Plans Up In The Air
When Verizon Wireless confirmed its new tiered
pricing Wednesday, beginning to phase out its $30 flat-rate for smartphones, there was no word about what may be the most eagerly awaited development for families that use smartphones, or would like to: Shared data.
Verizon Communications CFO Fran Shammo said in May at the Reuters' Global Technology Summit that its subsidiary, Verizon Wireless viewed eventual shared data in much the same way it did family plans that share minutes for voice calls that began with "individual minutes for individual users."
"I think it's safe to assume that at some point you are going to have mega-plans and people are going to share that mega-plan based on the number of devices within their family," said Shammo. "That's just a logical progression."
But that progression, logical as it may be, seems to be a slow one.
"We are still considering shared data plans as an option but we have nothing to announce in respect to those plans being available to customers," Verizon Wireless spokesman Brenda Raney told us on Wednesday.
While no U.S. carrier is currently offering shared data, wireless analyst Kirk Parsons of J.D. Power expects such plans to appear next year.
"It's a very big deal and would increase the usage of data/smartphone incidence," said Parsons. He said that when shared voice plans were introduced, "Those plan types took off and increased the overall household wireless incidence."
Family plans, like unlimited messaging plans, benefit carriers by stimulating usage and helping to bring a return on infrastructure investment, adds William Ho of Current Analysis.
"Shared smartphone or feature phone adoption allows customers to get their toes into the water without committing to individual data plans that lock each line in for the typical two years," said Ho. "Businesses already have 'pooled' voice and data plans so the concept isn't foreign to the service providers out there."
While a shared plan may undercut more lucrative plans, "the upside is better, in having a sticky product that increases revenue and decreases churn."
Verizon this week announced that monthly smartphone data plans after July 7 will cost $30 for two gigabytes of data; $50 for five GB or $80 for 10 GB, with $10 per GB above the limit of each plan. Feature phone users will continue to have a $10 plan for 75 megabytes of data.
Current smartphone customers will be allowed to continue their unlimited plan "even if they sign a new contract and purchase a new smartphone," Raney told us. She declined, however, to comment on the long-term future of grandfathered data plans.
Most Use Megabytes, Not Gigabytes
Research by Nielsen released last month suggests that a majority of smartphone users would be overpaying for all three plans. A study of 65,000 phone bills found that, even with an 89 percent rise in data use, the average was 435 MB. The busiest data surfers, averaging 4.6 GB, amounted to just 1 percent, which means it would be quite the rare smartphone user who would consume 10 GB to justify the $80 plan.
Verizon's new price tier presents an opportunity for differentiation to Sprint Nextel as the only one of four major carriers to still offer unlimited data.
"[Sprint has] been the fact that they still offer unlimited data plans," said Parsons. "It could impact recruitment of new customers thinking about switching to Sprint when Verizon Wireless is in the consideration set."
In addition to phasing out unlimited data, Verizon is also doing away with the promotional free unlimited wi-fi tethering to its LTE phones. Adding this option after July 7th will cost $20 for two gigabytes of data, while earlier adopters may pay $30 for unlimited access.
"Verizon Wireless is streamlining data plans and creating usage based options for customers that, regardless of the device, allow customers to select the plan that best matches their use," said Raney. "Our new usage-based data pricing model will offer customers more options for smartphones and updated options for basic phones, tablets and netbooks. There will be no change to existing data plans for standalone Mobile Hotspots (MiFi or 4G Mobile Hotspot) or USB modems."
Posted: 2011-07-09 @ 7:01am PT
I loved my Epic 4G - unfortunately two things happened. First, since January, I saw my signal strength degrade from 2 bars to no signal at my small-town home and the same degrading of signal in Southern Wisconsin in general. Second, Verizon brought LTE to Madison and Milwaukee (plus several other areas in Wisconsin) and Sprint has not announced a single Wisconsin region for 4G.
I am one of the fortunate ones. Unlimited data due to signing up pre-July 7th. That makes me eligible for unlimited 4G tethering/hotspot for $30 per month.
Since I am getting unlimited data, I don't mind paying extra for tethering. I also don't mind paying per line.
I am disappointed that Verizon is limiting their in phone data and then still charging for tethering/hotspot. Not directly, but when I looked at the options online in my account manager, they listed plans like 12 GB data + hotspot, 10 GB data, 8 GB data + hotspot, 5 GB data, etc. - but if data is capped, whether I use it in phone or tethered should not matter. It is the same amount of data.
However, I am glad to hear that data overage fees no longer have different charges. It use to be tethered data overages cost twice as much as broadband modem/tab data (as a Tablet PC user, I refuse to call any enlarged phone device a 'tablet' - a tablet is the Asus EP121 or HP TM2T or a ModBook, something that runs full Windows or Linux or OSX). Now they are recognizing people know 1 GB of data is the same burden on the network whether via a phone or tab or broadband modem. Thus all cost $10/GB overage now.
Its a wash - what is important to you? I watch a lot of Netflix on the go, so being able to catch a film without hunting down a wifi hotspot is convenient. Also, I like not having to worry if where I go has a wifi hotspot (as half the places I go do not). To me, the convenience is worth $60 a month to have - to others it isn't.
Of course, I am that heavy data user they hate. I'd be willing to pay for it, but $100 for 12 GB total data a month is a bit steep. I think if they hit the $5/GB mark I would gladly pay for all usage (that's $5/GB whether in phone or tethered). Let me save if I don't use it, and charge me if I do. That way us heavy users can pay our fair share and light users don't have to cover for us.
Posted: 2011-07-07 @ 9:12pm PT
If Verizon doesn't lower their prices (and make them more reasonable) or add family share plans, they're going to lose a lot of customers. A person is only willing to pay so much for the better service. AT&T is sounding very good right now, jump ship and I can pay $15/month for data (I won't use) and get an iPhone.
Now, since the carriers have admitted that the money is in the data, they can lower the price of our monthly service plans! or keeping lying, McAdams said no tiered 3G plans and shared data plans, so far the one is out the door and the other is still being talked about but has yet to be implemented.
There's nothing we can do if Verizon wants to lose customers!
Posted: 2011-07-07 @ 6:44pm PT
I believe I have a contract with them and they just broke it perhaps a lawsuit?
Posted: 2011-07-07 @ 4:46pm PT
when my plan is up I'm leaving Verizon of they change my plan
Posted: 2011-07-07 @ 4:13am PT
I agree. When data is limited to 2Gig, increasing pop up ads can certainly boost consumption. If your data is limited then the service provider should strip ads and only give you data you are willing to pay for. Revenue coming and going to Verizon?????
Posted: 2011-07-06 @ 10:13pm PT
Go away Tom S. Your Doom and Gloom makes people unhappy, and sad for you.
You're on VZW huh?
I'm on Sprint. I don't have to worry about things like roaming. Minutes. Data... I don't have to worry about ANY of the things you do... AND I pay about 60-70% of what you do.
All my free minutes start at 7PM. All my calls to cell phones? They're free! (Yes, ANY cell phone on ANY carrier.)
I haven't got the BEST and most exciting service, but you know what? I'm not complaining. Y'all can pay for what you want. I'm content knowing that I can roam for free, and I know I'll NEVER be charged anything extra. EVEN if I DO need to download a Win7 ISO from Microsoft....
How often do I need to download a Windows 7 ISO from Microsoft? Not very often. If I do? I'm not going to pay $10 a gig. I'm not going to pay ANYTHING extra.
Posted: 2011-07-06 @ 5:08pm PT
All it means, really, is the death of the smartphone and a return to simpler devices with less data reliant features. I find myself carrying my laptop to wifi spots more than using my android for things because of this threat already. Nearly every app on android is ad driven and noone will waste data usage on advertisements. This is a bad move for these companies to get deeper into the nickel-and-dime marketing that has become so popular lately. Sorry Android... your days with me at least are numbered.