Verizon Wireless’s New Plan: So Long Unlimited Data, Hello Buckets?
Remember the bad old days, before the advent of unlimited wireless data plans? Well unfortunately, with the vaunted arrival of 4G, it looks like those times might be returning if Verizon Wireless has its way. At the Barclays Capital conference in New York City this week, Verizon Wireless’s CEO Lowell McAdam said he hopes to ditch unlimited plans entirely on the company’s upcoming 4G LTE network, charging instead for “buckets” of megabytes.
McAdam also noted that, after the release of the first LTE-enabled device, Verizon anticipates using its 4G LTE network for voice starting in 2011. It remains unclear, however, whether Verizon’s LTE will also spell the end of unlimited voice calling plans.
Meanwhile, big carriers haven’t even been waiting for 4G to get here before doing whatever they can to increase people’s phone bills. A survey released this week by the Federal Communications Commission (FCC) shows that one in six mobile phone users has been hit by “bill shock,” or an unanticipated hike in their monthly service fee not caused by a change in their calling plan. The majority–or 52 percent–of these “shocks” added $25 or more to the consumer’s monthly bill, with the hikes amounting to $100 or more 23 percent of the time.
Also this week, AT&T–another big carrier now readying 4G LTE services–upped its early termination fee (ETF) on smartphones and netbooks by an astounding $150, from $175 to $325. For its part, Verizon has already been charging an even higher ETF of $350–or $25 more than AT&T–on Droids and other high-end mobile devices.
By the way, in the very same study released by the FCC this week, 43 percent of the respondents acknowledged that ETFs have represented a “major reason” why they’ve remained with their current carriers. (Yet somewhat ironically, 18 percent of the cellular customers surveyed were apparently blissfully unaware of ETFs at all.)
So, as for Verizon’s future intentions around unlimited service plans, although 4G bandwidth constraints might play some kind of role here, the primary driver is far more likely a old-fashioned desire to boost the bottom line.
The timing of MacAdam’s remarks this week couldn’t have been more unfortunate, actually, if wireless carriers really want to sell 4G services. Many folks are still struggling to pay all kinds of existing bills. Right now, the still impending 4G stands to many as a glittering diversion, a shining beacon of hope for better times ahead.
In the midst of this seemingly endless grim economy, who wants to be brought down ahead of time by thoughts of how much these sparkling new 4G wireless services might cost you in the future? Verizon Wireless might find it tough to turn back the hands of time, anyhow. Sprint is about to start selling the U.S.’s first 4G phone, the EVO 4G, and it offers unlimited 4G data–albeit at a $10 premium over 3G. In the wildly competitive wireless services market, how can Verizon abandon unlimited wireless calling plans unless all of its rivals decide to do just about the same?