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Verizon may keep tiered data plan in place  (Source: Reuters)
Tiered data here to stay thanks to family plan users

Smartphone users that have been enjoying “unlimited” data use (for one set price) on devices like the iPhone for quite some time. This was good for heavy users because they could do all they wanted without fear of a massive bill at the end of the month. The problem for carriers came when smartphone sales exploded and people actually started to consume that data. 

Verizon has hinted around at tiered data pricing strategy for months and has even trialed a tiered plan for users that didn’t typically consume much data. Verizon started a $10 monthly data plan that allows a scant 150MB of data use monthly. The goal of the plan was to lure users on family plans that didn't typically use data to try it out.

Apparently the move worked and it seems tiered data pricing may be here to stay at the nation's largest carrier. Verizon CEO Daniel Mead told Reuters at CES, "We've been very encouraged by that [family plan user data adoption]. We think it's helped us in terms of getting more members of a family using data."

The special $10 monthly plan was an offer that was supposed to disappear at the end of January 2011. However, Mead said the promotion is being evaluated and thanks to the success, it may lead to a more permanent plan. He said, "We're considering every option."

Verizon and all of the other carriers are keen to find ways to get more users on their higher margin data plans now that most people have mobile phones. Data use is a key profit center for carriers and Verizon expects its LTE data plans with much faster speeds to bring in more customers.

Mead added, "We're coming into an important phase of growth. I think we're going to see customer growth. We're going to see customer engagement in different ways."

 



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i don't mind
By superPC on 1/7/2011 12:04:38 PM , Rating: 2
i really don't mind tiered data plans as long as they keep the unlimited option with reasonable price. with increasing demand of video streaming on smartphone and maybe even video conferencing i'd even let them slide if they increase the unlimited plan by 10-15$ a month. i've use about 25 GB of unlimited data on my phone per month and i don't mind if i have to pay a bit more for it.




RE: i don't mind
By Lord 666 on 1/7/2011 12:19:56 PM , Rating: 2
Verizon already has plans to enable an option to purchase "bursting" of bandwidth for LTE during increased usage for an additional charge for consumers and different rates for government. They gave a demonstration of this of the hypothetical user at watching a ball game.

This priority concept will also be in place as well for packetized voice over LTE; specifically for wireless priority service (WPS).


RE: i don't mind
By SkullOne on 1/7/2011 12:43:10 PM , Rating: 4
Agreed. I don't mind tiered pricing provided I still get unlimited. My wife doesn't need unlimited. She could actually get by with that 150MB plan. That would save $20 which I would gladly put back into my own plan to keep unlimited data. In the end I should NOT have to pay more overall for two smartphones with proper tiered plans.


RE: i don't mind
By mcnabney on 1/8/2011 11:30:09 AM , Rating: 2
Usually the market determines pricing. Wireless companies could market 'unlimited' data when their networks were way-underutilized. Now things are getting a little more crowded.

I don't have an unlimited electricity, natural gas, or water plans available. Why should there be unlimited data. There is a cost to the wireless company for carriage.


RE: i don't mind
By myhipsi on 1/10/2011 8:45:59 AM , Rating: 2
You make a good point. Here in Canada Wireless data plans have been capped since day one, and even some home broadband services are capped.

I'm with Rogers for home internet. I get a 10 megabit connection at a 95 gigabyte monthly cap for $55. I rarely go over my limit, but when I do, I don't mind paying for the additional usage. Since I've been with Rogers I have absolutely no slow downs, even during peak hours, and I get the true rated bandwidth at all times (around 1250 KB/s). I consider the extra cost as an investment, if Rogers takes in more revenue from high bandwidth, high usage users (like me), they have cash to invest in better infrastructure more often, which means better, faster service for me in the future.

Most people who complain about data caps have no idea how business/economics works especially when it comes to networks, and they are unrealistic in their expectations about what an ISP can deliver for their dollar. They complain that ISPs don't invest enough in infrastructure, yet they don't want to pay for it. Every time a cap is mentioned they cry foul.

Anyhow, they'd better get used to it because like you said, as more and more people get online and want to download large amounts of data, the ISP are going to have to upgrade their infrastructure to accommodate the increase in usage. It's simple economics, and just because some people don't understand it, doesn't change that fact.

DISCLAIMER FOR THE NAYSAYERS: I'm not in the employ of any ISP or have any association with an ISP. I'm simply a customer who enjoys getting good internet service that I'm willing to pay for.


RE: i don't mind
By notfeelingit on 1/7/2011 1:17:01 PM , Rating: 2
If history is any indication your unlimited plan will be going the way of the dodo very shortly. 25GB of data a month? I'm assuming you're tethering. Just so you know, if you were totally above board with a current Verizon data plan (of which there are no unlimited), you would be paying $80 for 10GB + $10/GB. That puts you right at $230/month. Just for data.

Please, don't give these companies ANY positive feedback on tiered data plans. They are going to destroy mobile internet. Would you be ok with tiered data caps on your residential broadband?


RE: i don't mind
By superPC on 1/7/2011 1:34:11 PM , Rating: 2
no i'm not tethering. i'm just efficient at using my mobile. i stream video, video chat, and use torrent or download manager (megaupload and rapidshare are my good friend) -with resuming and chunking capabilities obviously- from the phone itself. and considering my monthly wired data usage is at least 150 GB, 25 GB is not that much (i use it mostly on my daily commute to work, i use public transport and spend 2 hours commuting). tiered data plan can be beneficial to all if priced correctly and with the unlimited option be ALWAYS available at a premium.


RE: i don't mind
By notfeelingit on 1/7/2011 2:21:07 PM , Rating: 2
Gotcha.

My point is that these tiered plans are nothing more than a clever system for confusing the consumer and boosting profits. Have a look at Verizon's current data offerings: http://www.verizonwireless.com/b2c/mobilebroadband...

Not a single unlimited plan, and these are tailored for people that need mobile access on their notebooks/tablets, which are very likely to have higher usage than most phones (your case notwithstanding). Why are they manipulating prices based on target device? A byte is a byte, no?


RE: i don't mind
By Mr772 on 1/7/2011 1:51:21 PM , Rating: 2
Don't be such suckers people. Tiered plans are only another way for them to charge you more for an already over priced service. The margins are crazy high on data service and text messaging.


RE: i don't mind
By phantom505 on 1/7/2011 2:16:01 PM , Rating: 3
My recommendation: less porn.


RE: i don't mind
By invidious on 1/7/2011 4:19:31 PM , Rating: 2
If they want to treat megabytes like minutes that is understandable. But realize that the profit is going to come from the penalties of exceeding the cap. The problem is that the size of the data cap needs to scale with the market and technology otherwise the value of the service degrades with time. Without regulatory oversight it is completely up to the provider how much and how often they increase the cap.

I dont know why it wasn't mentioned in the article but AT&T has been offering this for almost a year. AT&T offers 200mb/mo for $15 or 2gb/mo for $25. Once you exceed the block size they charge you for a second block.

It seems cheap at first but if you stream a 500mb movie they are going to charge you several blocks. And thats in addition to any costs for the subscription of the content host.

Tiered data plans are an enimy of the digital age. They may not seem bad at first but they will severely limit your ability to cost effectively use internet media services like netflix or e-radio. The 500mb movie i reference above would cost $45 on AT&T's "value" plan and $40 on this new verizon "value" plan.


RE: i don't mind
By BailoutBenny on 1/7/11, Rating: 0
RE: i don't mind
By ImEmmittSmith on 1/10/2011 9:55:45 AM , Rating: 2
I think tiered plans are just a way to charge customers more when they exceed their given data plan each month. Case in point, the very first month my daughter had her iphone, after 15 days of use, we received a message she was about to go over the 250mb threshold, which should not have been an issue. She doesn't send pictures/download/stream. After talking to her about several 20mb and 70mb data files sent, I contacted AT&T to find out what these could be and was told that they were system maintenance updates. Within the first 15 days, we had almost 150mb of system maintenance! WHAT?! Yes, if you look at your AT&T data usage, you will see large data files sent(AT&T doesn't differentiate between sent and received with data). I have the unlimited plan and I have quite a few large data files sent each month without my knowledge. All this to say, we ended up having to move to the 2gb plan just so we would not get hit with overages each month. AT&T says they have NO control of what gets updated each month and my response to them was that should be their cost of doing business, not the consumers. They disagreed! I filed a complaint with FCC! Let me know if you have a different experience, I was rather disappointed at AT&T disregard for billing me for data that I did not transmit.


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