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Verizon is roughly $18-28 USD/month more expensive than T-Mo for 6-Mo. upgrades; $8 USD/month more for 2-yr. plan

Verizon Wireless is changing gears after Verizon Inc.'s (VZ) $130B USD Sept. 2013 buyout of minority owner Vodafone Group plc (LON:VOD).  At the end of 2013 Verizon's had the highest average revenue per user (ARPU), something which both pleased and troubled analysts.  While having the industry's highest cell phone bills is good for Verizon's earnings in the short-term analysts were quick to express concern that the lack of discounts could backfire.
 
I. As Expected, Price Cuts Cometh
 
Craig Moffett, head analyst at MoffettNathanson Research, says that may no easy task, commenting in a research note:

There is a price differential where -- well, where even satisfied customers will declare enough is enough. The only question that remains is whether we have already crossed it.  They are vulnerable precisely because they have been so successful.

Jonathan Chaplin, an analyst with New Street Research, echoes in a separate note:

We expect rising competitive intensity to create a headwind for growth in 2014.  We don’t think Verizon is out of the woods. We believe competitive pressure is still coming.

This week Verizon finally acknowledged that it would need to cut prices in order to retain its dominant position.

It unveiled a new plan dubbed "More Everything".



One major impact of the new policy is that it makes Verizon's early upgrade plans much more competitive, particularly for those who have multiple smartphones on a large (>= 10 GB) family pool.
 
How does this work?  To answer that we have to first look at how the plans stacked up last year.
 
II. Early Upgrades and 2-Year Contracts -- Last Year Was a T-Mobile USA Blowout
 
Techlicious and others last year examined the price of early upgrade plans versus standard contract plans.  They compared AT&T, Inc.'s (T) Next early upgrade program and Deutsche Telekom AG (ETR:DTE) subsidiary T-Mobile USA's Jump program (the first of the early upgrade plans).
 
What they found was that the T-Mobile USA by far was the cheapest plan at 2 GB of data per month, with unlimited calling and texting.  The cheapest rival contract plan (with no early upgrade) was Verizon's, which cost $435 USD per month more, thanks to higher monthly bills ($60 USD/month for T-Mobile versus $100 USD/month on Verizon).
 
In terms of early upgrade plans T-Mobile USA's "Jump" plan was also the most affordable. With the $10 USD/month ($240 USD per 24 months) extra fee, you'd still be paying about $200 USD less than you would for a 2 year contract on Verizon.  And of course you're getting four new devices every years (trading in the old one, each time) versus only one on Verizon, and if you want to you can drop the service at any time (you're still on the hook for the device payments, but you can defray those by reselling your device and you won't be paying the early termination fees you would on Verizon).
T-Mobile Jump
For those wanting to upgrade, the Verizon $0 USD down "Edge" plan ended up costing about $370 USD extra per two years.  So Verizon was basically making money off anyone who wanted early upgrades.  Verizon also offered 6-month upgrades.  That bumped things up even more to a ~$695 USD premium, as you must have paid off 50% of the device's total costs to upgrade.
 
So for six-month upgrades on Verizon you were paying roughly $900 USD more on Verizon over two years than on T-Mobile.  That's about $38 USD per month extra.

Verizon Edge

Is Verizon's coverage advantage over T-Mobile worth $38+ USD per month?  That's debatable, but one thing's for sure -- AT&T's Next deal is worse.  AT&T's Next is even more expensive than Verizon and AT&T doesn't have as good coverage. 
 
AT&T's 3 GB tier (AT&T doesn't have a 2 GB tier) costs around $480 USD more than Verizon for a 2 year contract, and roughly $920 USD more than a two year upgrade cycle on T-Mobile.

AT&T Next

Adding "Next" will tack on nearly $500 USD more to your contract over two years.  So AT&T's 1-year upgrade cycle over the standard 2-year period is about $610 USD more than Verizon's 1 year upgrade cycle,  $260 USD more expensive than Verizon's 6-month upgrade cycle, and a miserable $1,175 USD more than T-Mobile's 6-month upgrade schedule.
 
Granted, AT&T has the fastest LTE (when available), plus you do get an extra gigabyte of data a month and somewhat better LTE coverage than T-Mobile.  But for that you're stuck in a contract, get half as many devices as T-Mobile, and are paying nearly $49 USD per month more.
 
In short, Verizon and AT&T's early upgrade plans both offered some unique perks last year, but were much more expensive ($35-50 USD/month) than T-Mobile.  A final thing worth noting is that AT&T did step up its own pricing game in Dec. 2013, bringing its Next plan's base pricing more in line with Verizon Edge.
 
III. "More Everything" Helps Verizon Blow Away AT&T's Lofty Prices, Compete With T-Mobile
 
Now, we get to the current question -- does "More Everything" make "Edge" a better deal than it was last year?
 
Verizon's new "More Everything" plan makes its "Edge" early upgrade plan a bit more competitive.  For those at the lowest data tier (250 MB) you get $15 USD off your monthly fee for smartphones.  For the majority of users who are in the 1-8 GB tiers (most customers), you'll get $10 USD off your monthly fee.  For those on plans with 10 GB or up (including pooled family data plans), you'll chop $20 USD off your fee.
 
That's a pretty nice improvement.  For users on smaller data pools you'll save $240 USD over two years, cutting the premium over T-Mobile USA down to around $28 USD.  For those on large family pools you'll cut it even further to around $18 USD per month.
 
At $18 USD per month extra, you start entering the territory that Verizon doesn't even need misleading pricing to get customers to choose it over T-Mobile USA -- some customers would consider its coverage and speed advantage worth that months, even if you are bound by a contract.

Verizon 4G LTE
Verizon leads in the LTE race. [Image Source: Verizon Wireless]

"More Everything" does not, however, eliminate some of the annoyances of "Edge".  For example you have to buy a new device, you can't bring your own like you could on T-Mobile or AT&T.

But what about customers who don't want to upgrade every 6 months?  For those willing to endure 2-year contracts there's also price breaks.  Individuals on 500MB, 1GB, or 2GB (most customers) get $10 USD off their bills.  Unlike the early upgrade pricing, there's no discount bump at 250 MB, though -- those customers get only $5 USD off their monthly bill.  Likewise those with basic phones (non-smartphones) get $5 USD off a month.

Verizon
Most customers will seem a modest price cut on their monthly bill with the rollout of "More Everything". [Image Source: PC World]

So over a two-year contract budget buyers will save $120, while regular customers will save $240 USD.  That means that T-Mobile USA (contract-free) individual customers who operate on a voluntary two-year upgrade cycle will now only be saving under $200 USD per two years, or about $8 USD a month.
 
In this case, the math works out even more favorable for Verizon -- $8 USD/month more for significantly better coverage (albeit with a contract)?  That seems an increase most customers would be willing to go for.
 
IV. "More..." Perks Sweeten the Deal
 
There's also other perks Verizon has added for More Everything subscribers:
data plans
Verizon has bumped its data allotments and given other nice perks. [Image Source: Hoovers]
  • Data Plan Bumps
    • Automatic for existing customers and new customers alike
    • $40 USD/month tier
      • Before: 500MB
      • After: 1GB
    • $50 USD/month tier
      • Before: 1GB
      • After: 2GB
    • $60 USD/month tier
      • Before: 2GB
      • After: 3GB
  • Cloud Storage
    • Free (was 5 GB free or $3 USD/month/line for 25 GB per line before)
    • 25 GB per line (up to 250 GB max on 10 lines)
  • International messaging (SMS)
    • Free
  • FamilyBase
    • Parental mobile device management software
    • free for 3 months, $5 USD/month after that
  • Cheaper long distance
    • $0.01/minute to Canada and Mexico
    • $0.05/minute to many other countries in Latin America and the Caribbean
    • free for 3 months, $5 USD/month after that
Verizon -- the nation's largest carrier -- is offering plenty of value when it comes to customers who want to upgrade every two years.  And for those who want 6-month upgrades, it still trails T-Mobile a bit, but has made it close enough -- particularly on large family data pools -- that it can justify its pricing somewhat.
 
V. A Thriving, Competitive Market
 
In this regard it's a big step forward.
 
Given that Verizon beat T-Mobile USA in new subscriptions last quarter (narrowly), this could pressure T-Mobile USA to make further cost cuts.  T-Mobile USA is profitable, so it can afford a bit of cutting.
 
And the pressure is really on AT&T which is looking ridiculous compared to both Verizon and T-Mobile now with regards to pricing.  Likewise Sprint Corp. (S) -- who doesn't offer early upgrades anymore, but does offer competitively priced "Framily" pools with unlimited data -- may feel some pricing pressure, given it own poor 4G coverage in many regions.

T-Mobile Sign
T-Mobile has pushed all the carriers to get more aggressive pricing-wise and move away from contracts and subsidies.

All of this is good news for consumers.  And yet again this justifies why mild anti-collusion regulation is necessary to maintain a competitive and free market. 

Look at AT&T's pricing (right now, pretty much the worse out there) and ask yourselves: had AT&T been allowed to merge with T-Mobile USA, would T-Mobile USA be offering the prices it does today and would Verizon feel compelled to put this much pricing pressure on everyone, as well?

Sources: Verizon Wireless, Youtube





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More competitive is so relative
By coburn_c on 2/14/2014 10:31:45 AM , Rating: 2
They are now at .01 competitiveness. Yeah the network is great if you're a farmer or a unibomber, but my god their prices are atrocious.




RE: More competitive is so relative
By p05esto on 2/14/14, Rating: -1
RE: More competitive is so relative
By Motoman on 2/14/2014 12:40:27 PM , Rating: 2
quote:
You're a little out of touch don't you think? FAR more people live in rural locations in the US than people live in city settings.


Not really...I think it was some point in the late 60s, or maybe mid 70s, when the population finally crossed 50% into the cities from rural.

But, there are still massive numbers of Americans who live in rural areas. And as a rule, they are horribly underserved by what city-dwellers consider "basic" services...like broadband internet and cell phone coverage.


RE: More competitive is so relative
By Motoman on 2/17/2014 1:20:46 PM , Rating: 2
For the record, I went and looked it up. I was *way* off myself.

Urban residency hit 51% right around 1920.

So...while there certainly are many tens of millions Americans that are "rural" - urban has been the majority for almost a century now.


RE: More competitive is so relative
By ven1ger on 2/14/2014 12:41:20 PM , Rating: 4
Hate to burst your bubble, but the number of Urban dwellers vs number of Rural dwellers is far greater. In 2012, rural dwellers accounted for about 17% of the population.

http://www.tradingeconomics.com/united-states/rura...

In the 2000 Census, rural population was about 20% and urban dwellers were 79%.


RE: More competitive is so relative
By tayb on 2/14/2014 12:48:05 PM , Rating: 2
What? Less than 20% of Americans live in rural locations.

http://www.huffingtonpost.com/2013/06/13/rural-us-...

The actual number appears to be closer to 15%. So I'm not sure what in the world you are talking about.


RE: More competitive is so relative
By Flunk on 2/14/2014 2:17:48 PM , Rating: 1
15% of the people in 95% of the space. That's the key issue right there. It's not worth the provider's while to build out the infrastructure.


By Harinezumi on 2/14/2014 2:49:41 PM , Rating: 2
As of the 2010 census, less than 20% of US residents were living in rural areas, and that share has been steadily shrinking for more than a century.


By jRaskell on 2/14/2014 3:18:18 PM , Rating: 2
quote:
City dwellers are the kind of people that are not very capable, not good with their hands, are lost without a strarbucks or shopping mall.


Looks to me like you're the one out of touch, and by more than just a little.


ATT dropped their prices two weeks ago
By happyfirst on 2/14/2014 1:26:13 PM , Rating: 2
This was quite a hard article to understand.

Is the writer of this article not aware that ATT lowered their prices? He states checking ATT and that they have the worst pricing. I don't see that. Or is this article only talking about specific cases and then generalizing across the board?

On superbowl day, ATT slashed prices on some plans.

My ATT mobile share plan unlimited talk/text, 10gb, and 4 smartphones now only costs $160/month.

When I go to verizon's site, the same would cost $260/month.

What am I missing?




RE: ATT dropped their prices two weeks ago
By BRB29 on 2/14/2014 2:41:56 PM , Rating: 2
The ATT 4 lines, 10GB for $160 plan does not give you the phone discount. You have to get your own phone.

If you want ATT to supplement your phones, then it will be $260 a month.

That is same exact pricing as Verizon with less coverage. Verizon is a better deal.

Compare to Tmobile, 4 lines with 10GB fast data(unlimited slow data) is $140.

That is what you're missing.


By happyfirst on 2/14/2014 3:42:06 PM , Rating: 4
Yeah, Verizon has "better" coverage. But ATT has "faster" network. So which is truly better depends on what one values more. And how one actually defines "better" or "faster". So personally, to be fair, on the contract pricing, I'll just call it a wash between the two.

But what if you do have your own phone? This article talks a lot about TMobile where you also have to get your own phone. Then ATT is only $160. So what's the better deal then? Does Verizon offer a similar deal?

What happens with Verizon when your contract is up AND you're still happy with your phone and don't want a new one. Is it still worth it paying full contract price? Or do you let Verizon sucker you back into a new contract in exchange for a new phone? At least ATT is starting to cater to both crowds. If coverage isn't an issue, then which is better? Verizon for only letting you choose between continuing to pay a lot or get a new phone you don't want OR ATT for ALSO additionally letting you choose to save even more and switch to the nocontract pricing plan?

I've had Sprint, Verizon, and currently am ATT. For the record, I hate them all. Coverage wise, for my family, Sprint had some holes in their coverage but it wasn't the end of the world. Verizon and ATT are the same, coverage wise, can't tell a difference. They just work. But Verizon just charges too much and IMO it's finally catching up with them, hence, why we now see them dropping prices. Let's remember, Verizon is only the same contract pricing starting yesterday when they announced this new more plan. I've been with ATT now for a year and coverage is fine, I make and receive calls just fine, so coverage to me at least seems irrelevant. Nobody in my family has complained about coverage. ATT offered a BETTER price earlier, and an even BETTER price a few weeks ago. When switching from Verizon, we were worried, but it's turned out to be a non-issue.

IMO, Verizon's "increased" coverage is greatly overhyped. I can get for some people that because of coverage Verizon is truly the only way for them to go and I can understand these Verizon people arguing coverage, coverage, coverage, but they need to keep in mind, they're the exception, not the rule. Most people are in areas with sufficient coverage from multiple vendors. Verizon knows this or they wouldn't be pressed so hard to drop prices. It will be interesting to see how long Verizon can go without offering cheaper nocontract BYOD plans.


By Belegost on 2/14/2014 4:42:18 PM , Rating: 3
So my wife was considering moving to the TMO plan for our 2 phones.

Then ATT went and let us get 10GB of shared data with our 2 phones at 130/month (before my corp discount) at just 1 year into our contract - effectively dropping the contract price a year early.

That move was honestly genius for holding onto customers. Now if we wanted to go to TMO it would only be $10 less per month for the plan (we regularly use around 8-9GB/month so TMOs 2.5GB is not enough), but we would need to buy new phones, and deal with worse LTE coverage in our area.

Also VZW touts their coverage a lot, but my parents have it, and the LTE coverage may be more than ATT, but ATT's HSPA coverage is better than VZW's LTE, and it makes a difference, when my parent's phones drop off LTE they're on EVDO at 500Kbps with latency measured seconds. I may drop off LTE more, but HSPA is a good fall back with 3-5Mbps and decent latency. So overall, I say the coverage is even.


By hangfirew8 on 2/15/2014 9:55:14 AM , Rating: 4

quote:
What am I missing?


You're missing that you're reading DT. If you expect fact-checking and good copy editing, go over to the sister site AnandTech.


So...
By villageidiotintern on 2/14/2014 12:48:36 PM , Rating: 2
...how much do those of us on unlimited plans save now?

That's what I thought.




RE: So...
By BRB29 on 2/14/2014 2:57:05 PM , Rating: 4
My old Verizon plan with 450 Minutes, unlimited Data and text was about $80 a month total after taxes and fees.

With this new plan that is supposed to save us money, Verizon charges you ~$100 after taxes and fees for 2GB of data and unlimited minutes and text.

Yes, the old unlimited plans saved about 20% for an average user. You save even more if you are a heavy data user. I've never been able to top 450 minutes but I have topped 10GB of data many times before. My average data usage is around 2GB.


RE: So...
By BRB29 on 2/14/2014 2:59:12 PM , Rating: 2
Verizon charges you per MB you go over instead of per GB. So it's pretty crazy.

That's why I just went ahead and got the $30 unlimited data when they came out with it.


Heh
By McGaiden on 2/14/2014 4:20:31 PM , Rating: 2
Even with these new plans, U.S. carrier prices are pure price gouging.

I'm paying 30 dollars a month for 5 gigabyte of data on LTE with 6000 SMS free all around the world and 600 calls within Europe for free and international calls the first 50 calls for a relatively low fee.

And I didn't even score that well. I know some people got pretty awesome contracts on 10 gigabyte+ of data and unlimited free calls/text in all of Europe during promotions with LTE.

And all of our operators are leading with healthy profits, so there's no reason for the American ones to follow suit if it weren't for their sickly greed.

You saw the same with the prices of Radeon R9-290/290X, which are astronomical in US and to some extent in Canada but normal elsewhere.
Something's deeply wrong with how business is being made in the US.




RE: Heh
By sgestwicki on 2/16/2014 2:16:40 PM , Rating: 3
The population density difference of Europe to the US is probably why there is such a price difference for the cellular plans. I expect Japan would have even cheaper plans then you have in Europe.


RE: Heh
By inperfectdarkness on 2/17/2014 3:07:09 AM , Rating: 2
Still waiting for prepaid-debit phones without monthly charges & with full coast-to-coast coverage.


Good dog that was confusing to read
By Belegost on 2/14/14, Rating: 0
By spamreader1 on 2/14/2014 12:44:45 PM , Rating: 2
Then again, it's not really much worse than the plan pricing on the carriers websites.

The myriad of options on what you can and can't do with variuos phones/devices on various plans that depend on the phone/device to discover that the plan you want isn't there, but if you get the phone you want they don't have a plan that you want, then you have to make sure that certain phases of the moon are in line with the Great and Powerfull Spagetti Monsters Will has become insane the last few years.

I miss the days of 1. "Here's the phones/devices we offer and thier prices." 2. "Here's the plans we offer and their prices." 3. "Would you like any accessories before you leave the store/site?" 4. "Will that be cash or credit?"


By ven1ger on 2/14/2014 12:55:49 PM , Rating: 2
Agreed, it was too confusing.

I just went to Verizon webpage to see what I would pay with The More Everything Plan my current setup with T-mobile. It came out to about $100 more per month. 4 lines, 3 smartphones, 1 basic, about 4 GB of data and it was $220, I currently pay $120 per month with T-Mobile. I guess it is the More Everything Plan, since I'd be paying more for everything I already have.

Seriously, if the other carriers could offer better pricing for their plans than T-Mobile, I'd make the switch.


More Money!!
By BRB29 on 2/14/2014 2:34:57 PM , Rating: 4
Holy crap! this is atrocious pricing. I switched to Tmobile from my old grandfathered unlimited data plan costing me only $77 amonth and I thought that was expensive.

Basically this new plan says

Minimum $40 for smartphone allowing unlimited text + talk.

You have add data. $40 for 1GB and $10 per extra GB it seems.

So basically, a single line plan offers me 2GB of data and unlimited text/talk for $90 amonth before tax and fees.

A comparable Tmobile plan with 2.5GB(unlimited slow data after you pass 2.5GB) cost me $60/month. Even if I finance my phone at $20 a month, I'm still $10 under. On top of that, Tmobile's phones are unlocked and often $50 cheaper. I can literally switch to any other GSM carrier I want anytime I want.

When you add additional lines to the Verizon "more" plans, you pay an extra $40 per line + whatever extra data you want.

For Tmobile it cost $30 for the second line with data and $10 after that for each line up to 5 total. I can literally get 4 smartphones and only pay $100 a month. Of course I have to pay for my phones myself. But even with the 0 interest financing offerings Tmobile offers, you still pay considerably less than Verizon when you have a family plan.

As usual, AT&T, Verizon and Sprint are ridiculous. Tmobile still makes more sense.

I do admit coverage is not as good as Verizon. But the money saved for that 2% of the time I don't have coverage is more than worth it.




Does Verizon throttle or FINE!
By stm1185 on 2/14/2014 12:50:02 PM , Rating: 2
If on Verizon you go over your data cap, do they throttle your speed as T-Mobile does, or do they FINE you?




RE: Does Verizon throttle or FINE!
By Rukkian on 2/14/2014 2:32:15 PM , Rating: 2
Technically, it is a charge and not a fine, but yeah they ars-rape you!


RE: Does Verizon throttle or FINE!
By McGaiden on 2/14/14, Rating: -1
By HomerTNachoCheese on 2/14/2014 3:34:26 PM , Rating: 3
quote:
The cheapest rival contract plan (with no early upgrade) was Verizon's, which cost $435 USD per month more, thanks to higher monthly bills ($60 USD/month for T-Mobile versus $100 USD/month on Verizon).


Once I got there, I just had to stop reading. Does anyone have a $435 per month bill (per line)? The article seems to be mismatching figures already, and skimming through seems packed with stat after stat in paragraph form. I am too tired from dealing with snow to try to compile that information in my mind into something useful. Maybe a table and less words next time would be nice.

</gripe>




Editing
By hangfirew8 on 2/15/2014 9:53:18 AM , Rating: 3
"says that may no easy task"

Hmmm. DailyTech lacks a reason to "be".

I've been away for a while. I see DT still has not hired a professional editor who reads articles carefully and corrects mistakes.

Stay true to yourself, DT.




Too complicated
By Dorkyman on 2/14/2014 1:21:07 PM , Rating: 2
We switched two family smartphones over to Ting from Sprint last fall, third family smartphone to EcoMobile (daughter uses her phone a LOT, now has unlimited everything for $50). Overall monthly bill dropped from $190 to about $100.

Looking at the bewildering options in this article, I'm not sure we could do better; maybe we could. Yeah, I know Sprint doesn't yet have the same 4G coverage as others, but we get it where we are and aren't concerned about getting 4G in Nebraska, so I don't care.




Verizon is growing big
By dreamjb on 2/15/2014 8:49:29 AM , Rating: 2
Verizon is growing big because of IMEI http://digitalunlocking.com/ unlocking trands which bring much more new customers every quarter




Truth in Advertising?
By EricMartello on 2/15/2014 3:13:47 PM , Rating: 2
Wait a sec, if they are selling it as the "everything" plan how can you have "more everything". Everything implies you "have it all" and there is no possibility that you can get more than everything. WTF this is giving me a headache.




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