Verizon Wireless revamps pricing plans

Verizon said its new plans, which include unlimited calling and texting, would take effect June 28 and would be offered as an option to current customers without a contract extension. AMY SANCETTA / Associated Press, File
Verizon said its new plans, which include unlimited calling and texting, would take effect June 28 and would be offered as an option to current customers without a contract extension. AMY SANCETTA / Associated Press, File
Posted: June 14, 2012

In a move that reflects both growing customer demand for mobile data and growing resistance to complex pricing, Verizon Wireless said Tuesday that it would replace its large array of cellphone pricing plans with a single set of "Share Everything Plans" that will enable a family using up to 10 mobile devices to share a single, metered data account.

The nation's leading carrier said its new data-centric plans, which include unlimited calling and texting, would take effect June 28 and would be offered as an option to existing customers without a contract extension. Customers who choose to stick with older, unlimited-data plans would have to pay full price to upgrade to a newer phone.

The new shared-data plans are designed chiefly for accounts that include at least one smartphone. Other customers will have two new options: a $40-a-month plan that offers 700 shared minutes and no data or texting, and a $70-a-month plan that offers unlimited calling and texting plus 300 shared megabytes of data.

"We wanted to simplify the experience for customers," Verizon spokesman Sheldon Jones said.

Under Verizon's Share Everything plan, a family will pay $50 a month to share 1 gigabyte of data a month, or $60 for 2 gigs, plus line charges. Above that, a customer can add 2 gigs a month for an extra $10. But customers who exceed their monthly plans will pay $15 a gig in overage charges.

Verizon will charge $40 a line for each smartphone on the account, $30 per basic phone, $10 per tablet, and $20 per netbook or similar device.

To make it easier for customers to use data under the shared plans, Verizon will drop the extra fee it imposes to use a smartphone as a mobile hot spot. Under the new pricing, a customer with, say, an iPhone and a WiFi-only iPad could connect the tablet through the iPhone and pay only for data usage.

Although Verizon, which has 93 million retail customers, said the new plans would "forever change the way customers purchase wireless service," it was unclear how other carriers might respond.

Second-place AT&T Mobility declined to comment on Verizon's new pricing plan. Sprint, the third-largest carrier, said it planned to stand pat as the only major carrier still offering unlimited data.

"Sprint believes that data pricing in smartphones is already very complex, which results in customers' spending a lot of time worrying about running over their limits," spokesman Scott Sloat said. "Sharing a monthly data allowance across a family of devices and people will only increase the potential of a surprise monthly bill."

Sloat said Sprint, which has added 5 million customers over the last year for a total of 56 million, has found that customers value unlimited data because it allows them to explore the large variety of unfamiliar services and apps available on smartphones, and also because they find metered charges mystifying.

"How many people know what a gigabyte is?" he asked.

Analysts said Verizon's break with the past would plainly be welcome to at least some customers.

"It's a different way of thinking of pricing," said Roger Entner, of Recon Analytics. "A lot of people complain about how complicated it is to understand your rate plan and your bill. This is going to reduce that significantly."

Entner said the new pricing might save money for customers on family plans who pay for lots of calling minutes each month. Others, including heavy users pushed to drop Verizon's old unlimited-data plan, might pay more.

Jeff Kagan, an Atlanta analyst, said Verizon's main goal is to appeal to customers with multiple devices seeking simpler choices and billing.

"The reason Verizon is doing this is to create a more loyal customer base," he said.

Contact Jeff Gelles at 215-854-2776 or jgelles@phillynews.com.


Eye on the Data

Verizon’s new plans provide unlimited texting and calling, but subscribers have to monitor data use, which is tricky. Here are some types of activity and a rough guide to the data they consume.

Streaming video. The biggest data consumption offender. One hour of YouTube-quality video eats up 120 megabytes, or 12 percent of Verizon’s cheapest new data plan, at 1 gigabyte per month. It’s better to indulge in YouTube and Netflix if you’re on WiFi.

Streaming audio. One hour a day of Pandora consumes nearly a gigabyte. Better go for at least a 2-gigabyte plan, if Internet radio is your thing.

App downloads. Phone applications vary greatly in size, but they can be huge. Apple limits application downloads over cellular networks to 50 megabytes. Google’s Android software has no limit, and its apps can be as large as 4 gigabytes.

Photos. Posting 10 photos a day eats up about 200 megabytes a month.

Maps. Navigation apps consume lots of data when they retrieve map images, up to a megabyte a minute.

Web surfing. Roughly speaking, 20 pages a day will eat up 20 percent of a 1-gigabyte plan. Those on plans of 2-gigabytes or more don’t need to worry about surfing.

Facebook. Roughly equivalent to Web surfing.

E-mail. Most e-mails are tiny, in terms of data. Basically, you can send and receive e-mail all you want, as long as it doesn’t have attachments.

Instant messaging. Like e-mail, this is a very economical way to communicate.

SOURCE: Associated Press

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