Verizon Wireless is planning this summer to begin forcing smartphone customers with unlimited data plans to switch to tiered plans when they upgrade, the company’s chief financial officer told Wall Street analysts on Wednesday.
At the JP Morgan Technology, Media and Telecom conference in Boston, Verizon CFO Fran Shammo said the company will unveil a “data share” pricing model by mid-summer, which will give customers the ability to buy an allotment of data that can be used across multiple devices linked to the same account.
As that plan rolls out, Verizon will discontinue its practice of allowing customers who have legacy unlimited data plans to keep those plans when they buy a new smartphone. Verizon stopped allowing new customers to buy unlimited data plans a year ago.
“As you come through an upgrade cycle and you upgrade in the future, you will have to go onto the data share plan,” Shammo said, “[We’re] moving away from, if you will, the unlimited world and moving everybody into a tiered structure data share-type plan.”
The CFO emphasized that the plan is “paper, not actual.” A Verizon Wireless spokesman declined to comment on issue.
AT&T Wireless, which led the industry with the first tiered data plans, continues to allow customers with legacy unlimited plans to keep that service when they upgrade. Sprint remains the only national carrier that offers new customers an unlimited data plan.
The idea behind Verizon’s change in strategy, Shammo said, is to increase the company’s revenue at a time when the cell phone market is already saturated with customers and voice minutes are dropping, sending average revenue per smartphone user down $10 over the past two years.
As attracting new customers grows more difficult, finding new ways to increase revenue from the customers Verizon already has is becoming the company’s top priority.
Though Verizon’s lowest, 2 gigabyte-per-month tier currently costs $30 — the same price as its legacy unlimited offering — the company knows that data usage is increasing, particularly as 4G-LTE networks make possible huge HD video downloads and machine-to-machine communications.
As customers increase their data usage on their devices, the company thinks they’ll move to higher and pricier tiers.
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3 Responses
I just totally don’t see the point in 4G with these data caps. What are really high speeds worth, if using them would mean your monthly data cap is reached in half an hour? Then what is 4G needed for?
In Israel I had totally unlimited data (including tethering) from Cellcom, 130 NIS per month. In the UK, I’m stuck with 1 GB which is the maximum here at O2. Another provider, “3”, does have unlimited plans but they do not include tethering unless you pay more… and their network isn’t as good as the others (like Sprint in the US, I guess).
I want unlimited data!
http://www.junefabrics.com/
will enable tethering if you want it. It works like a charm.
Verizon, you made a very obnoxious and self righteous omission of an option I do have. I CAN TAKE MY BUSINESS ELSEWHERE. And this decision was made after a Sham(mo) of a CFO talked with an analyst at J.P. MORGAN? What a dimwit. Not what will be perceived or remembered as a brilliant business decision.