Verizon Wireless has been hinting for some time that unlimited data plans for smartphones won’t be an option when its 4G Long Term Evolution network activates later this year. In June, Chief Financial Officer John Killian told Business Week that the company “will probably need to change the design of our pricing where it will not be totally unlimited, flat rate.”
Now company executives are talking about pricing based on speed as well as consumption. In Thursday’s Wall Street Journal, new CFO Fran Shammo, who succeeded Killian in September, said, “If you want to pay for less speed, you’ll pay for less speed and consume more, or you can pay for high speed and consume less.”
Take Your Pick
In June a Verizon spokesperson told us that the carrier planned to continue supporting its current slower 3G network for at least the next decade, and that references to tiered pricing involved 4G plans.
This suggests the current $29.99 flat fee for 3G users may be maintained to entice budget-conscious consumers, while the 4G network may be aimed at those willing to pay as they go, including businesses.
Wireless analyst Kirk Parsons of J.D. Power and Associates said choosing between standard speed and high speed might be an easier choice for customers than estimating their monthly data quota.
“From a consumer-perception standpoint, the idea of paying more for speed is easier to understand compared to amount of data consumed, since the general customer does not know how much … a downloaded file or just sending an e-mail impacts their plan,” Parsons said. “Having both in the mix to decipher what plan works best will be a challenge to communicate, which could mean targeting businesses first may make the most sense.”
In addition to its $29.99 unlimited data plan, Verizon last month added a $15 plan for 150 megabytes…