A Verizon executive said at a trade show this week the company would begin transitioning its 3G customers with unlimited data plans to the limited tiered-pricing plans it introduced last year.
Verizon has since clarified his comments, but it’s clear from the policy that, going forward, the carrier plans to get those customers grandfathered in on unlimited plans toward abandoning them.
Speaking to attendees at the JP Morgan Technology, Media and Telecom conference, as first reported by Fierce Wireless, CFO Fran Shammo said, “A lot of our 3G base is unlimited. As they start to migrate into 4G, they will have to come off of unlimited and go into the data share plan.
“And that is beneficial for us for many reasons, obviously.”
Obviously. After Shammo’s comments were widely publicized, Verizon backtracked — but only a little. It said customers who are on an unlimited data plan will only be forced to drop their unlimited plans if they buy a subsidized phone with a two-year contract.
If they buy the phone at full price (typically hundreds of dollars more), then they can keep unlimited — even if they upgrade a 3G phone to a model that runs on Verizon’s speedy 4G LTE network.
Make no mistake, though, this is bad news for the majority of Verizon’s unlimited customers. Yes, it’s been apparent for a while that the days of unlimited data — on every major carrier — were numbered.
When Verizon introduced tiered pricing last year, it ended unlimited data for new customers, but those who already had it were grandfathered in, and could even keep it if they upgraded.
Once Verizon’s new policy is in place — when the carrier introduces shared-data plans this summer — that will change. The genius of this policy, from Verizon’s perspective, is that U.S. customers have been trained to buy phones at low prices.
Seeing that the shiny new Droid RAZR Maxx costs $ 650 contract-free, compared with $ 200 with a contract, I suspect very few upgraders will opt for the former.
SEE ALSO: Why the iPad Can’t Use FaceTime Over LTE: It’s Apple’s Call
Which is a shame, because that might not be in their best interests. As the carriers argue, only a miniscule portion of their customers actually go over their data limits, so limited or tiered pricing is just fine for most.
But LTE is a new technology, and customer are still forming their habits in using it. The promise of 4G tech like LTE was to allow phones to do things remotely that they couldn’t before — video conferencing, live streaming, HD movies.
Now that promise is looking emptier and emptier as unlimited plans disappear (or are “throttled” in some way).
For those lucky enough to still have unlimited data on Verizon, you should think long and hard before giving it up simply to get a cheaper phone. In the case of the RAZR Maxx, keeping unlimited data adds up to an extra $ 18.75 per month.
Now, overage charges on Verizon are $ 10 for every gigabyte you go over, and the top plan you can get is 20GB a month (for $ 80).
The question you have to ask yourself is: Am I getting this LTE phone for a simple speed upgrade for the things I’m doing already, or am I getting it to enable those video-related abilities that 4G always promised? If it’s the latter, it could well be worth the expense.
It’s too bad customers typically don’t think that way before they buy a phone. The sad truth is that most will probably abandon their unlimited plans for a cheap phone, inadvertently buying into a policy designed to encourage them to use LTE in the most limited way possible.
That may be good for Verizon, but it’s bad for anyone who ever thought advanced networks would free us from hunting for the closest Wi-Fi signal. Progress it isn’t.
Image courtesy of iStockphoto, sshepard
More About: 4G, droid razr maxx, LTE, verizon
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Tags: backwards, Data, phasing, step, UNLIMITED, Verizon
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