Wednesday March 2, 2011 7:00 am
Verizon to drop unlimited data plans in favor of tiered pricing this summer
Verizon Wireless will likely do away with its unlimited data plan and switch to tiered pricing sometime this summer, Fran Shammo, president and chief executive officer of Verizon Telecom and Business, said Tuesday.
Verizon announced in January that it would ditch its 150MB $15 monthly plan and require new smartphone users to subscribe to its $30 unlimited plan. That move, announced several days before Verizon unveiled its version of the iPhone, was intended to attract new customers to Verizon and the iPhone, Shammo said.
Verizon opted for the $30 plan because "we didn't really want to put up a barrier to anybody who wanted to come over and experience the Verizon Wireless network," Shammo said at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco. "So we felt that it was important to go out at the $30."
Everybody knew, however, that that was not a long-term strategy, Shammo said. "We're going to move to a tiered pricing," which will probably happen "in the mid-summer timeframe."
Verizon has a "very big opportunity" when it comes to new smartphone customers, especially since 67 percent of its current user base is using feature phones or multimedia phones, Shammo said. Since the launch of the iPhone, however, Verizon has seen "a fairly significant number of feature phone customers migrate to the smartphone."
As smartphone prices come down, more and more people will opt for the devices, so "we've got to give them an [affordable] entry point," he said. At this point, Verizon is still "wrestling with what that entry point is." The $15 150MB plan "stimulated a lot of activity on the lower end," so Verizon is "measuring that to see what we want to do on LTE."
When the HTC Thunderbolt launches, "that will give you a flavor of what our tiered pricing structure will be," Shammo said. Verizon has not yet confirmed an exact launch date; Shammo said today that the Thunderbolt will be available "very shortly."
Shammo declined to provide exact details about how many iPhones Verizon have sold ("it's too soon"), but promised exact numbers during the company's next earnings call. He did say, however, that "the launch has gone flawlessly."
This article, written by Chloe Albanesius, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc..
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