Verizon's McAdam defends concept behind shared data plans
Verizon Wireless' (NYSE:VZ) new shared data plans will make life simpler for customers who want to connect multiple devices and share data between them, even if they might wind up paying more for such plans, according to Verizon Communications CEO Lowell McAdam.
"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."
McAdam said that such plans will give customers greater flexibility in how and when they use mobile data services, and that in the future this usage will be both on the go, in the home and in cars. "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."
Verizon's new plans, dubbed "Share Everything," will go into effect June 28 for new customers and existing customers who want to switch to them. All of the plans will include unlimited voice minutes, unlimited text, video and picture messaging and a single data allowance for up to 10 Verizon devices. In addition, the carrier's Mobile Hotspot service on all the devices is included in the Share Everything Plans at no additional charge. Customers are free to keep their existing plans, but there is no fee or contract extension to move to the new Share Everything plans. 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.
McAdam also touched on several other hot-button topics during his appearance at the investor conference. The executive said he still thinks federal regulators will approve Verizon's $3.9 billion worth of AWS spectrum purchases and marketing deals with cable companies by late summer. He also said the company is seeing strong interest in its 700 MHz Lower A and B Block spectrum, which Verizon has pledged to sell if the cable deals get approved.
The spectrum "should be in someone else's hands," he said. "They will be able to use it more effectively than we can. My expectation is we will get at least what we paid for it if not a little better." Verizon spent a total of $9.36 billion on its 700 MHz spectrum during the FCC's 2008 auction, with around $4.4 billion of that going to A and B Block licenses.
Additionally, McAdam said that he currently thinks "the pendulum has swung a bit more to regulators putting their thumb on the scale" in terms of how competition is managed and fostered. He said that there are some who think seven or eight carriers is what is needed for a healthy wireless industry but that the sheer cost of building and managing wireless networks means that having that number of carriers is not likely a long-term possibility.
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