NEW YORK, June 12 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
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.