Verizon Wireless set off a firestorm this week when Fran Shammo, CFO of parent company Verizon Communications, told investors at a conference that the carrier plans to require current customers with unlimited smartphone data plans to switch to bundled, limited data offerings.
The news, as reported by Fierce Wireless, indicated that the move would impact those customers that have so far been “grandfathered” into their current $30 per month, unlimited data plans for their 3G and LTE-enabled smartphones.
According to a transcript from Verizon Wireless Shammo said:
“So as you come through an upgrade cycle and you upgrade in the future, you will have to go onto the data share plan. And moving away from, if you will, the unlimited world and moving everybody into a tiered structure data share-type plan.”
The data share plan Shammo referred to is an offering the carrier expects to launch later this year that will provide for a bucket of data that is to be shared among a variety of devices or lines on a family plan. Carriers have been hinting at such offerings for several years following the explosion of tablet devices onto the market. To this point, tablets have required consumers to select separate cellular data plans for both their smartphone and tablet devices, or rely on Wi-Fi to connect their tablets.
Verizon Wireless last year followed the lead of rival AT&T Mobility in doing away with unlimited data plans for smartphones in favor of capped plans that top out at 2 gigabytes of data transmission, though the carrier has run several promotions offering customers up to 4 GB.
AT&T Mobility has so far not hinted at requiring customers currently on unlimited data plans to have to change. Sprint Nextel continues to offer unlimited data for its smartphone customers, but has hinted that it might be open to raising prices in order to continue supporting that ability. T-Mobile USA offers buckets of data access at unimpeded speeds, after which data speeds are throttled.
On a separate topic, Shammo also noted that the carrier would likely begin rolling out VoLTE services later this year, adding the voice component to what is now a data-only LTE service. The main challenge for the carrier is to provide a coverage footprint similar to its current 3G network that the carrier has said it expects to have by mid-2013.
Verizon Wireless noted at last week’s CTIA event in New Orleans that service quality was also a sticking point with the technology, something it did not want to risk for its still core voice service.
Bottom Line: At a time when smaller rivals continue to highlight the “unlimited” nature of their data services, Verizon Wireless’ hint at forcing customers to these new offerings is a strong statement. The announcement shows the level of comfort Verizon Wireless has with its place in the market. Seeming to be forcing customers to give up something for what would appear to be an inferior offering can only be imagined by the brave. Look for this move to garner strong reaction in the coming weeks, similar to Verizon Wireless late last year looking to charge consumers for using a credit card to pay their phone bill online. It should be noted that Verizon Wireless eventually backed away from that plan.
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