Verizon Wireless Launches New Data Portfolio – Discontinues Unlimited Plan Option

| Jul 7, 2011 | Consumer Services U.S.
| Analyst: Deepa Karthikeyan

Event Summary

July 7, 2011- Through its data tracking activity, Current Analysis noted that Verizon Wireless has overhauled its data plan options for feature phones and smartphones. The carrier now offers a $10 75 MB plan, a $30 2 GB plan, a $50 5 GB plan and an $80 10 GB plan. The $10 plan is applicable to feature phones only, the $30 plan is applicable to feature phones, smartphones, tablets and netbooks while the $50 and $80 plans are applicable to all aforementioned devices on top of USB modems and mobile hotspot devices. The $20/2GB tethering option is now available to all but the $10 75 MB plan users.

Quick Take

Analytical Summary

• Current Perspective: Moderate on Verizon Wireless’ new data plan options as even though the vast array of options will ensure that the carrier meets the needs of most user groups, the high cost could be a deterrent. Verizon Wireless’ discontinuation of its unlimited plan will not come as a surprise, as it’s a fact confirmed by the carrier several times this year. While Verizon Wireless has not let down its data-centric LTE seeking user base by offering high end options such the 10 GB plan, it has done so at a steep premium through the elimination of the old unlimited option. Being the third national tier to shed truly unlimited data options will work toward Verizon Wireless’ favor, however, its appeal now will be strictly limited to Verizon Wireless loyalists and those seeking a premium wireless experience and the benefits that come with it.

• Vendor Importance: High to Verizon Wireless as the carrier’s new data add-on options make its overall portfolio more diverse. While the new data plans leave rivals open to touting greater value, Verizon Wireless will pull out its LTE trump card to justify the high cost (at least for a short while as it holds the title of being the exclusive national LTE provider). Any revenue loss it experiences over the short term (namely by potential cost conscious data users opting for Sprint or T-Mobile’s service), it will make up via the high cost plans of its new portfolio that will continue to appeal to Verizon Wireless aficionados.

• Market Impact: High on the wireless service segment, because the trend started by AT&T in 2010 of abandoning unlimited data options in favor of tiered plans has now taken over the Tier 1 wireless space. Today all three major carriers-AT&T, T-Mobile and Verizon Wireless offer users tiered data add on options. Sprint for its part has announced no impending plans to this effect, which will make data-centric users look more favorably toward it. As tiered usage capped plans gain momentum, unlimited prepaid smartphone plans may emerge as an attractive alternative.

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Current Perspective

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