site Search:


 
   
story category
Verizon CEO Thinks Awful New Data Price Hikes Are Revolutionary
McAdam Thinks New Fees, Low Caps Makes Life 'So Much Easier'
by Karl Bode Thursday 21-Jun-2012 tags: business · wireless · alternatives · bandwidth · Op/Ed · wireless
After a year or more of hinting at such a change, Verizon recently unveiled the company's "Share Everything" data plans to more than a little disappointment by consumers and consumer advocates. The plans, while offering unlimited voice and text services, impose very high per byte data charges on consumers in addition to per device fees. The move is purely about protecting Verizon revenue by jacking up the price of data to keep users paying more money as they consume fewer texts and voice minutes.

Click for full size
There was absolutely nothing revolutionary about the new pricing; it's about keeping revenues, long bloated by pure cash cows like SMS, inflated by over-charging consumers for data. Customers (well many of them) aren't stupid; Verizon's forums have been in revolt after it took Verizon all of a year to go from $30 for unlimited data to $50 for a few gigabytes.

With the launch getting slammed by the press and public, Verizon CEO Lowell McAdam this week took to the podium of detachment and denial (TM) at an investor conference, informing attendees that the price hikes are secretly fantastic because paying too much for data service will make consumers' lives easier and they'll "feel better" about their electronic devices:

"Customers have been telling us for years, I don't want to have a separate account for my iPad or for the four appliances in my house. It's a sea change," McAdam said at the Guggenheim Securities 2012 TMT Symposium. "This, I think, dramatically changes how people feel about their devices. The usage moves around. They don't have to think about it. It just makes life so much easier for them."

"Is it going to cost them more money? Yeah. But it will probably shift their wallet spend from things they do individually into a bucket of gigabytes," he said. "The relationship will change. This will be something much more ingrained in their life as opposed to something that's attached to their hip."

Does McAdam really believe that dramatically raising data prices on users, socking them with $10 per gigabyte overages, and charging device fees per type makes life "so much easier" for consumers? Probably not, but the sales pitch requires that he pretend consumers get something out of this equation other than a skyrocketing data bill. Verizon and McAdam are fortunate they operate in a duopoly, ETF-laden market where you can can punch consumers squarely in the face without many repercussions, though with prepaid interest surging and some new MVNO data pricing approaches on the horizon, Verizon may want to rein in the greed just a tad.

view: topics flat text 
Post a:

rollinraver

join:2002-04-27
Buffalo, NY

*insert loud obnoxious noise*

Hear it? That's the sound of McGreedy driving V* into the ground...
Crookshanks

join:2008-02-04
Northeast PA
Reviews:
·Frontier Communi..

Re: *insert loud obnoxious noise*

Not likely as long as they remain the only viable choice for many people (nobody else around here has coverage worth a damn) and those same people prove unwilling to part with 24/7 connectivity.

I may well reach the point of parting with my smart phone and perhaps even a cell phone altogether. It is not a life essential service; it's a major convenience to be sure but you can live without a cell phone.

The straw that will break this camel's back is if they ever outright take away my unlimited data. I'm willing to forgo a device subsidy to keep it; if they yank it away from me after I fork over $600 for my next phone I'll be beyond furious.

For grins and giggles I did do a price comparison. My fiancee and I both have smartphones, mine on unlimited and hers on the 4GB promo plan. We have the 700 minute talk/text plan and receive a 22% discount on that plan and my data feature. Our total bill before fees/taxes/insurance is $133.57. We use around 500 minutes month, 1200 SMS and 7 to 8GB of data across both devices.

Under the new plan:

2 x smartphones - $80
10 GB data plan - $100
22% discount on data - ($22)

Total: $158.00 ($24.43 more than we pay now)

To match what we currently pay:

2 x smartphones - $80
4GB data plan - $70
22% discount on data - ($15.40)

Total: $134.60 ($1.03 more than current plan, no big deal there)

Now we probably could make 4GB of data work; it just sucks that our choice is to pay more money or give up the things we currently enjoy using our smartphones for.

xmarklive

@tmodns.net

Re: *insert loud obnoxious noise*

Hello if they force you to get rid of the unlimited ......they already have with the throttling. Why do people forget about that.
Crookshanks

join:2008-02-04
Northeast PA

Re: *insert loud obnoxious noise*

They aren't throttling, they simply give lower data users a higher QoS tier during times of congestion on the 3G network. Unless you live in an overburdened market odds are you won't even notice; I haven't and my monthly average is more than 5GB.

pende_tim
Premium
join:2004-01-04
Andover, NJ
Are you sure the discount will still apply to ALL the data costs?
Crookshanks

join:2008-02-04
Northeast PA

Re: *insert loud obnoxious noise*

Time will tell for sure but I've heard from two people within Verizon that discounts will apply to all tiers of data but NOT the device fees.
openbox9
Premium
join:2004-01-26
japan
kudos:2
Let's compare this FY to VZ's next couple of FYs and see how this change "drives VZ into the ground". I'll bet you a beverage of your choice that VZ will be sitting better two years from now than it is right now.
elray

join:2000-12-16
Santa Monica, CA

Life is Easy!

McAdam is providing what Mom wants, since she pays the bill.

Data Hogs will no doubt, be unhappy with the new direction.
A relative few will actually investigate other options and pursue them, the rest will just whine.

Meanwhile, 100 million+ postpaid customers will shrug and pay, for what they perceive is the best service available.

Boricua65
Premium
join:2002-01-26
Sacto Sh*tty

Re: Life is Easy!

said by elray:

Meanwhile, 100 million+ postpaid customers will shrug and pay, for what they perceive is the best service available.

I'll be one of the 100 million+ . I just recently added my mom ($9.99) to my plan so I really can't go anywhere .
--
Illegal aliens have always been a problem in the United States. Ask any Indian. Robert Orben

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1
I think the majority of consumers will continue to stay on their existing plans, while avoiding these shared plans, as the bang for the buck is terrible. As data continues to gain popularity, these outrageously pricey family plans will look even more ridiculous.

I just can't see too many moms agreeing with the concept of buying 2 items together for $20 instead of 2 items each at $5, because that is what this new pricing seems to be when stripped of its marketing blurbs.

mking128

join:2005-08-10
College Point, NY
kudos:1
Reviews:
·Verizon FiOS
·Time Warner Cable
·RoadRunner Cable

Re: Life is Easy!

Let's see, stay on my existing unlimited plan when our family shared plan contract expired in 16 months & keeping it, NOT going to pay full retail for a non-subsidized smartphone at $600 (that's usually obsolete in 6 - 12 months with newer models)

There's going to be a "huge" market for pre-owned CDMA phones that are perfectly fine for most non-geek users. Root it, flash a custom ROM & good to roll - maybe won't even be bothered with a new contract with ETF at all.

Now, of course, they're probably come up with schemes for eliminating those grandfathered plans & bundles, one way or another, sooner or later - in the codeword of "enhancements" for ......... shareholder values & return on investment, not for the consumers.
openbox9
Premium
join:2004-01-26
japan
kudos:2
said by jmn1207:

I think the majority of consumers will continue to stay on their existing plans

Just wait until those consumers have to choose between $199 or $649 smartphones.
NeoandGeo

join:2003-05-10
Harrison, TN

Re: Life is Easy!

Hopefully the Google Play route for Nexus devices will come over to the CDMA side. Unlocked No-Contract Galaxy Nexus is $399.

Until I can get a Nexus device brand new straight from Google my next phone will be a $200-$250 (~6 month old) like new condition phone from eBay.
openbox9
Premium
join:2004-01-26
japan
kudos:2

Re: Life is Easy!

said by NeoandGeo:

Hopefully the Google Play route for Nexus devices will come over to the CDMA side. Unlocked No-Contract Galaxy Nexus is $399.

I do not see that happening.
NeoandGeo

join:2003-05-10
Harrison, TN

Re: Life is Easy!

Probably not. If you live in a city area you could get a Straight Talk Sim and put it in a Galaxy Nexus and get 3.5G speeds for $45 a month. That route is looking sweeter to me since I just moved out of the boonies.

FBGuy
Premium
join:2005-03-19
Evanston, IL
Reviews:
·Comcast
·T-Mobile US
that is the most ridiculous part about being a verizon customer. you have to buy the unsubsidized phone at the Verizon price. Then, after you have bought it, there is no guarantee that they will let you put it on your existing plan. Verizon loves their contracts and f***ing their customers. I was going to jump on my father-in-laws business account when my T-Mobile contract is up, but I think I'm going to avoid Verizon for another 2-3 years.

I've priced similar plans on Verizon to what I have at T-Mobile. I'd be paying over $50/month more for Verizon. Not going to happen.
openbox9
Premium
join:2004-01-26
japan
kudos:2

Re: Life is Easy!

said by FBGuy:

you have to buy the unsubsidized phone at the Verizon price. Then, after you have bought it, there is no guarantee that they will let you put it on your existing plan.

Huh? If you purchase a VZ approved device, at whatever price, why would VZ not allow it on the network?
said by FBGuy:

I've priced similar plans on Verizon to what I have at T-Mobile. I'd be paying over $50/month more for Verizon. Not going to happen.

And I've priced equivalent plans with the other major carriers and my cost with VZW is equal to, or less than, equivalent services. It's relative. Go with what works for you. That's what makes choice a good thing.
altidude

join:2002-12-26
Ventura, CA

Re: Life is Easy!

said by openbox9:

said by FBGuy:

you have to buy the unsubsidized phone at the Verizon price. Then, after you have bought it, there is no guarantee that they will let you put it on your existing plan.

Huh? If you purchase a VZ approved device, at whatever price, why would VZ not allow it on the network?

VZ, in some cases, makes you "upgrade" your plan depending on the new phone. It's not that they don't allow the new phone on their network, you just need to pay up to use it. People are going to be forced on to this new VZ pricing scheme over time.

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1
I hear you. I've been taking advantage of retail buy back programs. It won't be the same, but it will take some of the pain away, and you can just leave at any time and sell your phone to recover some of the purchase cost. No ETF to worry about on a month-to-month plan.

BF69
Premium
join:2004-07-28
Camden, TN
said by jmn1207:

I think the majority of consumers will continue to stay on their existing plans, while avoiding these shared plans, as the bang for the buck is terrible.

Except for new customers after the 28th won't have a choice. They'll HAVE to go with the new plans. Of course one wonders how many new customers Verizon will get when people actually compare prices.

I think in a matter of months when Verizon see a huge drop in new customers and a higher than average churn they'll have no choice but to adjust pricing.
Crookshanks

join:2008-02-04
Northeast PA
Reviews:
·Frontier Communi..
said by elray:

Data Hogs will no doubt, be unhappy with the new direction.

Define data hog. My usage of 6 to 7GB/mo is higher than the median because I stream Pandora at work. According to 3G Watchdog (plug: an awesome app, even for those with unlimited data plans) Pandora accounts for about 85% of my usage, so we can discount the rest as not being anything special.

Pandora mobile runs around 80kbit/s. ISDN lines were capable of delivering that much bandwidth before the 1990s. That's only 2.6% of the available bandwidth on a 3G evdo channel and will barely even be noticeable on a 4G LTE one. You really think that makes me a "data hog"?

Leave some

@networktel.net

Re: Life is Easy!

Yes, you are a data hog.

BF69
Premium
join:2004-07-28
Camden, TN
I don't think 6 or 7 GB makes one a hog no matter what some ANON poster says. That being said you can just use Wi-Fi at work to stream your Pandora.

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1

Re: Life is Easy!

Why do you assume that employers are content to allow their employees to use their network to stream music throughout the work day?

We don't want people to do this where I work, in an office with over 300 people, and we communicate this to everyone at least once per month. It's not enforced unless it is significantly abused, but it's not something we officially allow.
Crookshanks

join:2008-02-04
Northeast PA
What makes you think my employer allows personal devices on the business network? Even if they did why should I allow them to potentially monitor my traffic when I'm paying Verizon money for a mobile internet connection that's in my name?

Linklist
Premium
join:2002-03-03
Longport, NJ
kudos:5
said by elray:

Meanwhile, 100 million+ postpaid customers will shrug and pay, for what they perceive is the best service available.

Yes, Verizon & AT&T, and even Sprint just keep adding customers like crazy with no end in sight.

»www.fiercewireless.com/special-r···ter-2012

Subscribers just keep going up


Most customers; lowest churn


Somehow, I don't see them overly concerned with customer defections over their new shared data plans.

The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2

Re: Life is Easy!

I'd just like to point out, that graph is terrible from a statistical standpoint. You can't really see these exponential growth rates.

BF69
Premium
join:2004-07-28
Camden, TN
Since new customers after the 28th HAVE to take these new plans do you think Verizon is going to keep geting many new customers? If someone has access to Verizon, at&t, Sprint, T-Mobile what makes you think they look at all these plans and say "Yep these Verizon plans are the best of them!"

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1

Re: Life is Easy!

Can't you still have a 3 phones on their own plans? Why would Verizon stop anyone from doing this? If you need 3 phones with 4GB of data each, why go with a shared plan?

BF69
Premium
join:2004-07-28
Camden, TN

Re: Life is Easy!

said by jmn1207:

Can't you still have a 3 phones on their own plans? Why would Verizon stop anyone from doing this? If you need 3 phones with 4GB of data each, why go with a shared plan?

Verizon doesn't have that double data promoting anymore. Current plans are 2 GB, 5 GB or 10 GB.

Anyways after the 28th any NEW customers have to go with the new plans. Current customers can keep the old plans for now. In other words if you a customer of any other carrier now and after the 28th you are thinking about switching to Verizon you HAVE to take the new plans.

Linklist
Premium
join:2002-03-03
Longport, NJ
kudos:5
I checked with Verizon online and the individual line plans will still exist. All the prices being quoted lately are for the Shared FAMILY plans. Of course, we will want to see if prices are changing for Individual(1 device) plans too, but apparently they will still exist.

quote:
You are now chatting with 'Darryl'

Darryl: Hello. Thank you for visiting our chat service. May I help you with your order today?

You: After June 28, are all the single line plans going away? I only need 1 smartphone with limited minutes and 1 or 2 GB of data. Especially the 65 plus plans.

Darryl: The single line plans will remain.

You: Thanks. The bloggers make it appear that the share everything plans are all that will be availalble.

Darryl: that applies to family plans only.

You: Ok. Thanks for help. When my Sprint plan ends early next year I will look at Verizon LTE smartphone options.

BF69
Premium
join:2004-07-28
Camden, TN

Re: Life is Easy!

said by Linklist:

I checked with Verizon online and the individual line plans will still exist. All the prices being quoted lately are for the Shared FAMILY plans. Of course, we will want to see if prices are changing for Individual(1 device) plans too, but apparently they will still exist.

quote:
You are now chatting with 'Darryl'

Darryl: Hello. Thank you for visiting our chat service. May I help you with your order today?

You: After June 28, are all the single line plans going away? I only need 1 smartphone with limited minutes and 1 or 2 GB of data. Especially the 65 plus plans.

Darryl: The single line plans will remain.

You: Thanks. The bloggers make it appear that the share everything plans are all that will be availalble.

Darryl: that applies to family plans only.

You: Ok. Thanks for help. When my Sprint plan ends early next year I will look at Verizon LTE smartphone options.

Verizon reps are known to be wrong. Trust me on Verizon own support board people have asked about how employee discounts will be handled and we literally got at least 4 different answers from Verizon reps.

Also it's called Share EVRYTHING not Share FAMILY. And yes it applies to single lines too.

Linklist
Premium
join:2002-03-03
Longport, NJ
kudos:5

Re: Life is Easy!

said by BF69:

said by Linklist:

I checked with Verizon online and the individual line plans will still exist. All the prices being quoted lately are for the Shared FAMILY plans. Of course, we will want to see if prices are changing for Individual(1 device) plans too, but apparently they will still exist.

quote:
You are now chatting with 'Darryl'

Darryl: Hello. Thank you for visiting our chat service. May I help you with your order today?

You: After June 28, are all the single line plans going away? I only need 1 smartphone with limited minutes and 1 or 2 GB of data. Especially the 65 plus plans.

Darryl: The single line plans will remain.

You: Thanks. The bloggers make it appear that the share everything plans are all that will be availalble.

Darryl: that applies to family plans only.

You: Ok. Thanks for help. When my Sprint plan ends early next year I will look at Verizon LTE smartphone options.

Verizon reps are known to be wrong. Trust me on Verizon own support board people have asked about how employee discounts will be handled and we literally got at least 4 different answers from Verizon reps.

Also it's called Share EVRYTHING not Share FAMILY. And yes it applies to single lines too.

I guess we will see after the 28th who is right. Won't we.

BF69
Premium
join:2004-07-28
Camden, TN

Re: Life is Easy!

said by Linklist:

I guess we will see after the 28th who is right. Won't we.

Yep. I know I will be. As I said CURRENT customers can keep the old plans not new one that sign up after the 28th. As I said Verizon reps are notorious for being wrong.
Chubbysumo

join:2009-12-01
Superior, WI
Reviews:
·Charter

Once your contract is up switch to prepaid

Take your phone or device and switch to a prepaid MVNO. Heck, with paying full price for your phones, and the ridiculously cheaper plans thru prepaid MVNOs, you will actually spend less overall per year than you would with a subsidized phone. I pay 45 per month for unlimited everything(thru Straight talk on my Iphone). Sure, while the data isnt truly unlimited, its still cheaper than any post-paid plan out there. There are a number of prepaid MVNOs that use Vzw's network(and even roam on sprint too), so the coverage is the same as it would be as with one of the big 4, but its just cheaper, or you can even go back to an old pay by the minute plan if you only use a few minutes per month.

See 14 replies to this post
ShellMMG

join:2009-04-16
Grass Lake, MI

Dumbphones too

VZW is obviously trying to push dumbphones out of the market. They're offering two lame tiers, the cheap one only gives you unlimited voice with no texting option; the expensive one forces you to buy 300Mb data in order to get texting.

We're a family of four on a 700min shared plan with unlimited texting, NO data use. We'll be using out existing contract as long as we can but now that are kids are older, we'll phase our their $9.99/mo ($15 after taxes) lines.

When the phones eventually must be replaced, we'll go prepaid unless VZW comes to its senses. They're the only network that reaches us right now.
Kevin Bryan

join:2012-03-19
Scotland, CT

staying on the Veirzon network with unlimited texting

said by ShellMMG:

VZW is obviously trying to push dumbphones out of the market. They're offering two lame tiers, the cheap one only gives you unlimited voice with no texting option; the expensive one forces you to buy 300Mb data in order to get texting.

We're a family of four on a 700min shared plan with unlimited texting, NO data use. We'll be using out existing contract as long as we can but now that are kids are older, we'll phase our their $9.99/mo ($15 after taxes) lines.

When the phones eventually must be replaced, we'll go prepaid unless VZW comes to its senses. They're the only network that reaches us right now.

Got the perfect answer or at least a fairly decent one. Page Plus Cellular. They used to to be a pager company and then about 13 years ago they sold their assets to a company that later became Verizon Wireless. As a result, they were allowed to sell prepaid cell service on the Verizon network. Page Plus is based in Holland, Ohio.

Prepaid wasn't a good deal until a few years ago. Then they started offering unlimited calling and text for 39.95 a month. They still offer that price point. Page Plus also offers 1200 minutes / 3000 text for 29.95 a month. Furthermore, you can just add dollar amounts to your account if you wanted to do per minute rates. For example their $80 plan is good for a whole year and 2000 minutes. For the kids, you could get $20 a month -unlimited texting add ons. Its worth checking them out. However, its probably best go to with a dealer who knows what they are doing. Try A google search for Kitty Wireless. They are based in Maine. My family has been using them for a couple years.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

No Shocker

Verizon killed unlimited data after they saw AT&T being able to do the same. Most likely if there is no major customer defection from Verizon the same pricing will come to AT&T.

For me, once my wife's Verizon contract is up at the end of the year, we are looking at Virgin Mobile.
--
Romney 2012 - Put an adult in charge.
osravens

join:2011-01-26
Cumberland, MD

The Only Thing Revolutionary....

....is Lowell McAdam's audacity to come at this as a benefit for consumers.

Insatiable greed will end the gravy train for them soon enough. I can't wait to see the day when they start losing customers. It's coming.

Just like big cable and satellite, you can't keep begging for more with a customer base who has less and less to give.
openbox9
Premium
join:2004-01-26
japan
kudos:2

Re: The Only Thing Revolutionary....

Shared data plans are evolutionary, not revolutionary. Poor choice of words by Karl Bode See Profile.

Jason Levine
Premium
join:2001-07-13
USA

Comparison Spreadsheet

Verizon Shar···ison.pdf
Verizon Shared Data Plan Comparison
I made a comparison spreadsheet of their current Family Plan prices and their new Share Everything pricing. (See attached PDF.) To keep things fair, I kept the data for Share Everything at 2GB per smartphone. There are definitely situations where you'd save money, but mostly if you already pay for unlimited texting (or if you have an unlimited minutes plan with one phone). Otherwise, you'll wind up paying more. Sometimes, much more.
--
-Jason Levine

See 6 replies to this post
old_wiz_60

join:2005-06-03
Bedford, MA
Reviews:
·Verizon FiOS

Bull.

It's just a way to hide much higher charges to use data. The fees will make it a heck of a lot more expensive to use data and with LTE coming in they will be raking in the cash. The CEO is looking forward to another huge bonus after the money rolls in.

scott2020

join:2008-07-20
MO
Reviews:
·VOIPo
·Callcentric

Re: Bull.

Yep, and 99% of everyone will smile and pay, because they can't part with their superphones. Verizon will charge what people are willing to pay, and AT&T will soon have the exact same type of plan structure. Unless people start leaving (which they won't) things will continue down this path.
tmc8080

join:2004-04-24
Brooklyn, NY

customers flock to prepaid..

many hard-core.. defend post paid to the last straw are flocking to prepaid service as the price and terms of service become unbearable for post paid accounts.

Saturday, 18-May 09:23:42 Terms of Use & Privacy | feedback | contact | Hosting by nac.net - DSL,Hosting & Co-lo
over 13.5 years online © 1999-2013 dslreports.com.