Verizon Wireless plans to begin shifting existing customers away from unlimited data plans as the carrier upgrades customers from 3G networks to its faster 4G LTE network.
Verizon stopped offering unlimited data plans to new customers last July, but those who were already on unlimited data plans were considered "grandfathered" in and were allowed to keep the same plans even after updating their devices.
But Verizon Communications CFO Fran Shammo said at an industry conference yesterday that soon customers upgrading from 3G to 4G LTE plans will be required to choose from a new set of tiered data-share plans.
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"As you upgrade in the future, you will have to go onto the data-share plan," Shammo said. "A lot of our 3G base is unlimited. As they start to migrate into 4G, they will have to go into the data-share plan. And that is beneficial for us."
Verizon's data-share plans will lock customers into a limited pool of data that can be shared amongst family members or devices, making it easy to have data-ready tablets, smartphones and other gadgets all on the same plan.
Verizon hasn't announced when the policy change will go into effect, but the new data-share plans are expected to be introduced this summer.
Beneficial to who?
It's clear how the shift will benefit Verizon. "It allows them to in the future be able to more closely match its revenue opportunities with its traffic opportunities," Pacific Crest analyst Steve Clement told TechRadar.
"As you move into a 4G environment, where the consumption of data becomes more appealing, they'll have a better ability to monetize that consumption," he added.
Grandfathered users who've been practically swimming in data for years aren't going to be happy about the change, and Clement said he's skeptical that consumers will benefit from it.
The new data plans could, depending on pricing, be beneficial to families or users of multiple data-ready devices who don't want to pay for more than one data plan.
"It's a little hard to make that judgment without seeing the actual pricing and so forth," Clement said. "On the face of it, though, you're being forced to give up that unlimited ability. I mean, that's a negative for a consumer."
Clement noted that of the few carriers that do still offer unlimited plans, T-Mobile has already begun capping data speeds, though it might be in Sprint's best interest to continue offering true unlimited data.
"That creates more market differentiation for Sprint, and so provides further incentive for them to try and perpetuate those plans," he said, though that might necessitate more price hikes.
Via USA Today