Verizon has decided to throw their loyal customers under the bus in order to make a boat load of money!! Come on man!!! Do you guys not make enough money? As if we our cell phone bills are not high enough, Verizon is now getting rid of it’s unlimited data plan. Verizon is already not offering the unlimited data plan to new customers, but they now plan to end it for customers who were ‘grandfathered’ into the plan.
Verizon Wireless is planning this summer to begin forcing smartphone customers with unlimited data plans to switch to tiered plans when they upgrade, the company’s chief financial officer told Wall Street analysts on Wednesday.
At the JP Morgan Technology, Media and Telecom conference in Boston, Verizon CFO Fran Shammo said the company will unveil a “data share” pricing model by mid-summer, which will give customers the ability to buy an allotment of data that can be used across multiple devices linked to the same account.
“As you come through an upgrade cycle and you upgrade in the future, you will have to go onto the data share plan,” Shammo said, “[We're] moving away from, if you will, the unlimited world and moving everybody into a tiered structure data share-type plan.”
The CFO emphasized that the plan is “paper, not actual.” A Verizon Wireless spokesman declined to comment on issue.
AT&T (T, Fortune 500) Wireless, which led the industry with the first tiered data plans, continues to allow customers with legacy unlimited plans to keep that service when they upgrade. Sprint (S, Fortune 500) remains the only national carrier that offers new customers an unlimited data plan.
The idea behind Verizon’s change in strategy, Shammo said, is to increase the company’s revenue at a time when the cell phone market is already saturated with customers and voice minutes are dropping, sending average revenue per smartphone user down $10 over the past two years.
As attracting new customers grows more difficult, finding new ways to increase revenue from the customers Verizon already has is becoming the company’s top priority.
Though Verizon’s lowest, 2 gigabyte-per-month tier currently costs $30 — the same price as its legacy unlimited offering — the company knows that data usage is increasing, particularly as 4G-LTE networks make possiblehuge HD video downloads and machine-to-machine communications.
As customers increase their data usage on their devices, the company thinks they’ll move to higher and pricier tiers.
Or, in CFO-ese: “With the construct that we have dealt with around data share and where we see consumption of LTE going, when you put the combination of them together, we are fairly confident that we will see people start to uptake in the tiers, which is really where we will get the revenue accretion in the future.”
That’s how Shammo put it in his JP Morgan talk. Translation: You’re going to suck down more data and pay Verizon more for that privilege.
Dragging existing unlimited customers away from their unlimited data plans isn’t the only way Verizon is upping its take. The company recentlyimposed a $30 “upgrade fee” on customers, which Shammo said has been a success.