Verizon Unveils Industry's Most Expensive Metered Data Plan
July 5, 2011 7:30 PM
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Verizon drops the metered data plan hammer next week. Existing customers will be spared for at least one upgrade cycle, but new customers will bear the full brunt of the nation's most expensive data plan.
LTE tethering is no longer free for anyone. For new subscribers it's not unlimited, either.
Big Red kills free LTE tethering, charges new customers lots of money for their data
Verizon Wireless (
) has been cagey with regard to details of what its
new metered smart phone data plan
would entail. Now customers may find out why.
New smart phone subscribers will no longer have the option to get unlimited data, starting July 7. In its place they will have an array of plans that while gentle on overages and flexible, are generally expensive for base use.
The cheapest plan will be $30 USD/month for 2 GB -- $5 USD/month more than AT&T Inc.'s (
on an identical data allowance
. Verizon does not offer a 200 MB plan like AT&T ($15 USD/month). Instead, it offers two pricier, higher cap plans -- $50 USD/month for 5 GB or $80 USD/month for 10 GB. Overages at least, are relatively reasonable compared to past rates on Verizon's metered air cards, dropping in at $10 USD per extra GB.
The good news for existing customers is that they will be able to keep their unlimited data plans for at least one more upgrade cycle.
Verizon also revealed details on its plan to crack down on LTE hotspot usage. Here existing customers aren't entirely spared -- for them the previously free unlimited data service will now cost $30 USD/month. New customers have it even worse, though -- they won't have an unlimited option. They will only get a $20 USD/month 2 GB option.
The pricing was revealed by Verizon spokeswoman Brenda Raney in
The new data costs will take effect July 7. During the interview Verizon also revealed that
shared data plans
("family plans") will indeed be incoming -- similar to T-Mobile and AT&T's. Verizon has not yet put a timetable on the deployment of those plans.
The details revealed indicate that Verizon -- currently the largest network in the U.S. in terms of mobile subscribers -- will also be the most expensive network in terms of data plans.
Deutsche Telekom AG's (
) T-Mobile USA is currently the cheapest of the metered plans, offering rates of $15 USD/month for 200 MB, $20 USD/month for 2 GB, $30 USD/month for 5 GB, or $60 USD/month for 10 GB. T-Mobile followed AT&T's lead and
killed unlimited data plans in May
Currently the only carrier with no official plans to switch to metered connections is Sprint Nextel Corp. (
). CEO Dan Hesse argues that customers value the simplicity and value of its unlimited plans. However, he warns that Sprint
may someday consider metered plans
if the market demands it.
Sprint has also suggested that if the pending
gets approved, that it may be
pushed out of business
. If Sprint indeed folded or was acquired by another carrier (such as Verizon), the U.S. would be left with only two mega-carriers -- AT&T and Verizon. Those carriers, notably, also have the highest planned data costs for new subscribers.
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RE: Bait and switch
7/6/2011 12:56:51 AM
The problem is that the cell phone market is a pseudo market. American telecoms are not forced to compete with each other, because we can't just buy any phone and use it on any network. Because of carrier exclusivity, not to mention the crapware carriers install on devices, they can ignore quality network performance and good customer service. They can also all miraculously "match" their competitors prices, never having to undercut each other on price. It's akin to collusion or price-fixing without the CEO's actually getting in a room and breaking the law.
Even worse, if you have a problem with a device you bought from one of these carriers, suddenly it's not their concern; the manufacturer is responsible for the product itself. Carriers don't take any responsibility in providing quality equipment; they're completely hands off when it comes to the merchandise they sell. With 2 year contracts, they don't have to care about the customer, just the customer's monthly payments. Not many other merchants would be so brazen about this.
Buy something from Nordstrom or REI, for example, and if something goes wrong with it, the store takes responsibility and takes the merchandise on return. These companies put customer service first; cell phone carriers are the exact opposite.
Sorry for the rant. Cell carriers just really get to me.
RE: Bait and switch
7/6/2011 2:44:23 AM
This is what happens when there isn't a true free market. If you bundle phones with carriers then carriers do have a hold on you if you want the latest and the greatest.
I'm from India and here we do not have any such restrictions on most phones. You buy a GSM phone and you can slip in a SIM of any GSM carrier in India. And the call rates are the cheapest on the world. I don't think any country would offer Rs. 0.6 (or even lesser) (0.014 USD according to google) per minute for an outgoing call and free for an incoming call. Message rates are slightly higher at Re. 1 (0.023 USD) if you do not opt for a message plan or much lower at Rs. 0.01 if you opt for some of the special message plans.
Internet usage was always metered here, either being restricted to hours per month or low data caps. Unlimited plans are a rarity and overall low speeds prevail. But data plans look to be the exception here. I am currently paying Rs. 80 (1.804 USD) for a 2GB data plan and there are no restrictions on tethering (none that I have heard of or seen till now).
The point of all this is that with the sheer number of telecom operators per region(4-8) competing for a pie of this high growth market, call rates are the cheapest in the world with not many restrictions on things.
The downside of phones and carriers not being bundled are more expensive phones, being sold at full price, since the carrier does not subsidise them and there is no contract as such to lock a customer in.
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