Verizon Wireless unveils shared data plans; rivals may follow
NEW YORK, June 12
NEW YORK, June 12 (Reuters) - Verizon Wireless is revamping its prices with new service plans that include unlimited calls and texts and the ability for customers to share their data allowance among multiple devices as it looks to shake up the U.S. wireless industry.
The biggest U.S. mobile operator is hoping to entice customers to connect more gadgets like tablet computers to its network with the new plans as customers will be able avoid paying separate data subscriptions for each device.
Verizon Wireless is a venture of Verizon Communications and Vodafone Group Plc.
The revamp, which Verizon Wireless has been considering for more than a year, is aimed at helping Verizon's top line as an increase in connected devices would mean more revenue. Some analysts expect rivals to begin offering similar plans.
Today most consumers do not choose tablets with cellular connections as they prefer to stick to more limited range Wi-Fi wireless networks rather than pay a second cellular data fee.
And while some consumers spend less time on the phone and send fewer text message, they are rapidly increasing their data usage, according to service providers.
As a result, the biggest U.S. operators have been increasing their data prices even as they've lowered traditional phone call prices.
While Verizon's new offer involves a higher fee per gigabyte of data, Verizon hopes that the inclusion of unlimited voice and texting and the shared data element would help make the plans popular with consumers.
"What I'm doing is giving you the flexibility to share the data you've paid for," Chief Marketing Officer Tami Erwin told Reuters. "Customers who are using more than one device will very quickly see the value in this."
Today, for example, a customer might have to pay extra for going over their data usage allowance even though they may not have used their full allowance for their smartphone. With a shared plan this would not be an issue, Erwin said.
"This is really intended to drive growth. My expectation is it doesn't change our margins," she said.
Recon Analytics analyst Roger Entner said he expects Verizon's biggest rival AT&T Inc to follow with a rival offering very shortly and that other rivals will eventually add shared data plans. AT&T has said recently that it would look at providing shared plans.
Under Verizon's new plans, available starting June 28, a smartphone customer would pay a monthly access fee of $40 that includes unlimited calls and texts, and a fee of $60 for two gigabytes of data, which could be shared with up to 10 devices.
Each additional device requires another access tariff such as a $10 fee for a tablet or a $20 fee for a laptop.
Today Verizon customers pay $30 for 2 gigabytes of data and $40 for the cheapest voice plan with 450 minutes of talk time and another $20 for unlimited text messages. But if a customer also wants to connect a tablet computer today they have to pay another $30 a month for another 2 gigabytes plan, leading to a total bill of $120 per month.
For a customer who needs a combined data allowance of 4 gigabytes for their tablet and their smartphone, the total fee, including voice, would still be $120 under the new plan.
On average Verizon Wireless customers use about 1 to 2 gigabytes of data on their mobile device, according to Erwin who said that customers' data usage keeps growing. She declined to comment on the trends for voice usage.
Verizon Wireless customers will be able to choose to stick with the existing service plans but any new customers will be required to sign up for the shared plans from June 28 onward, even if they do not intend to connect a second device.
Recon Analytics' Entner said that the new plans were a good deal for heavy data users. It will appeal to the top 20 percent of mobile users as they could potentially save money while many customers who are less interested in data usage may end up sticking with their current data plans.
"This is for the technorati who have multiple devices," Entner said. But he noted that it could also be especially helpful for families where data and voice usage varies hugely between different people in the family.