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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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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.


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