Year in review 2012: Verizon, AT&T and C Spire Wireless launch shared data plans
The news: After months of hinting, Verizon Wireless (NYSE:VZ) shook up pricing in the U.S. wireless market when it unveiled its new Share Everything shared data plans in mid-June. New smartphone customers are required to purchase one of the plans and grandfathered "unlimited" data plan customers have to do so as well if they want to obtain a new smartphone at a subsidized price. The plans offer unlimited voice and messaging, and customers pay a per-device connection fee per month ($40 for smartphones and $10 for tablets, for example), and then pay for data on a usage-based scale ($50 per month for 1 GB of shared data up to $100 for 10 GB of shared data). The data bucket can be shared with up to 10 devices.
In August AT&T Mobility (NYSE:T) offered its own shared plans, called Mobile Share. The plans are similar in many respects to Verizon's plans, though new customers are not required to sign up for them.
Then, in early December, regional wireless carrier C Spire Wireless launched shared data plans as well, dubbed simply "Shared Data." The plans are similar in pricing to those of the two Tier 1 carriers, but regional operator C Spire said that it will allow customers to top up their data buckets mid-month with a range of "passes" so they do not incur overage charges for exceeding their limit.
Why it was significant: Verizon had signaled as far back as December 2011 that it would launch shared data plans in 2012, and when it did the change was significant, if not entirely smooth. Yet for Verizon, the plans have been a hit: Verizon said that by the end of September more than 13 percent of its customer base was on the new plans. For its part, AT&T said it has signed up 5 million customers to the plans.
Meanwhile, Sprint Nextel (NYSE:S) and T-Mobile have each taken turns knocking the shared plans as confusing and too expensive. Both Sprint and T-Mobile have been busy touting their unlimited data plans, with Sprint going so far as to make an entire TV commercial to mock the concept.
Yet for Verizon, AT&T and C Spire, the shared plans are about playing for the future. Smartphone penetration has eclipsed 50 percent of the market in the United States, according to Nielsen, and tablet sales are expected to continue to be strong, according to various analyst estimates. Thus, it makes sense for both carriers and consumers to consolidate those connection costs under one bill. Verizon and AT&T envision a future where lots of gadgets in people's homes are connected to LTE--and they all dip into the same bucket. As voice and messaging become commodities, the carriers though are looking at their bottom lines and seeing opportunities to get more revenue from all of those devices that customers are putting onto their networks.
- 3Year in review 2012: Verizon, AT&T and C Spire Wireless launch shared data plans