Will AT&T and Verizon's shared data plans spur other carriers to adopt them?
After months of teasing, AT&T Mobility (NYSE:T) unveiled its "Mobile Share" shared data plans just weeks after Verizon Wireless (NYSE:VZ) did so via its "Share Everything" plans. Both plans are fairly similar, although AT&T does not require new customers or those who want to upgrade to a subsidized smartphone to choose the new plans. Both plans offer unlimited voice minutes and messaging and charge customers based on how much data they use.
AT&T and Verizon often set the agenda of the wireless industry. So does this mean that other wireless carriers will also introduce their own shared data plans? I don't think so.
Both Sprint Nextel (NYSE:S) and T-Mobile USA have blasted the shared data plans from Verizon and AT&T. In its response to AT&T's shared data plans, Sprint argued that shared plans "significantly increases the potential of a surprise monthly bill due to data overage charges and driving greater customer dissatisfaction. Sprint currently offers customers industry-leading data plans on smartphones providing an unlimited data experience while on the Sprint network that eliminates the worry of any data overage charges."
And in a blog post late last month, T-Mobile said Verizon's shared data plans are costly, complicated and punitive. In a statement Wednesday, Harry Thomas, director of product marketing with T-Mobile, reiterated the points raised in the blog post. "Rather than having to account for each device on a shared family data plan, T-Mobile customers can use their existing data plan to power multiple devices, while still saving hundreds of dollars annually," he said.
Representatives for MetroPCS (NYSE:PCS) and Cricket provider Leap Wireless (NASDAQ:LEAP) declined to comment, and a U.S. Cellular spokesman said the company was comfortable with its current data plans and always looking to give customers choice. A C Spire Wireless spokesman did not immediately have a comment.
All of these companies are likely to steer clear of shared data plans for the foreseeable future because they don't want to be lumped in with AT&T and Verizon. Increasingly, the two largest carriers have found themselves isolated from the rest of the pack because of their size. To be seen by customers as "not Verizon and AT&T" may be beneficial to the market's smaller carriers.
There are other reasons smaller carriers may be wary of adopting shared data plans. First, they simply do not have the size of Verizon or AT&T, and so cannot afford to potentially antagonize and lose any customers with such changes. Second, their lack of size also means that there are likely fewer raw customers with multiple devices (smartphones, tablets, hotspots and the like) to make shared plans economically viable and necessary. Third, the smaller carriers may not have the billing infrastructure in place to support such plans (though I am sure many vendors would be happy to change that). Finally, adopting such plans would mean accepting that Verizon and AT&T dictate how they should do business, which they are loath to do.
Some, however, think that while smaller carriers are in a wait-and-see mode now regarding shared data plans, they will ultimately adopt similar plans. "If the big ones are successful, the small ones will follow, undoubtedly," Recon Analytics analyst Roger Entner said. "It's the type of pricing innovation that you can do when you have size."
Verizon and AT&T often (though not always) lead the pack in terms of pricing decisions because of their size and stable positions as leaders in the marketplace. Other carriers do not have to follow them, and in the case of shared data plans, it is likely they will not for the foreseeable future. I just hope these smaller carriers continue to come up with innovative offerings for their customers in the meantime. --Phil