Verizon Wireless is following AT&T’s lead and cooking up tiered data plans. So long, unlimited mobile data.
Details are sparse about Verizon Wireless’ planning, but Bloomberg reports that the telecom carrier will go tiered. Bloomberg quotes Verizon CFO John Killian as saying: “We will probably need to change the design of our pricing where it will not be totally unlimited, flat rate.”
It’s unclear whether Verizon Wireless will directly match AT&T’s pricing model, which includes 2GB of data for $25 a month and $10 a month beyond for each $1GB over the cap. AT&T also has a lower $15 plan for 200MB of data usage a month.
AT&T’s plan raised a bit of a ruckus, but a larger question was whether Verizon would follow. If Verizon Wireless stayed in the unlimited data camp it could tax its network, but also put AT&T in a competitive bind. Now that the two big wireless dogs are going to metered access other carriers will follow. They’d be stupid not to follow suit-unless you have plenty of capacity and need more customers (Clearwire).
We discussed the industry implications of following AT&T’s data cap plan last week. In a nutshell, the industry is better off with tiered plans. Consumer behavior is likely to change. A few key points:
- Apps will be judged based on efficiency and data usage;
- Consumers are going to shun mobile video and streaming music services;
- High-end data hog smartphones may look less appealing.
That final point is the real item to watch. While the tech savvy may pay up for data, the average user is either going to stay well below the cap and shun broadband-ish services or just get a dumber phone. My guess is folks will still get the fancy phones, but change behaviors. As Bernstein analyst Craig Moffett recently said consumers mobile video habits will change “Customers will pause before clicking on that link you just sent of the squirrel on water skis,” he said.