Verizon Wireless (NYSE:VZ) is putting the final touches on new data price plans to coincide with the upcoming launch of its LTE network. And those plans will likely eliminate any unlimited data offering in favor of a tiered data pricing model, according to Verizon Communications CFO John Killian. In addition, the company estimates that its smartphone users typically use between 600 MB and 800 MB of data per month, which is similar to what AT&T has reported for average iPhone data usage.
During an interview with Bloomberg, Killian said that the company anticipates a huge demand for wireless data as new 4G phones offer data-intensive applications like ,video and that the company "will probably need to change the design of our pricing so it will not be totally unlimited, flat-rate."
Verizon streamlined its data price plans early this year and currently requires 3G smartphone users to pay $30 per month for unlimited data. 3G multimedia device owners are required to pay $9.99 per month for 25 MB of data. Meanwhile, competitor AT&T Mobility (NYSE:T) on June 2 revamped its data pricing plans, moving from an unlimited model to a tiered system. New AT&T customers can purchase 200 MB of data for $15 per month or 2 GB of data for $25 per month.
Killian also said that Verizon believes that smartphone users, which currently make up about 17 percent of the carrier's user base, will make up 70 percent to 80 percent of its base "over time."
Verizon Wireless, which is a joint venture between Verizon Communications and Vodafone, may also start paying a dividend to both its parent companies in 2012, Killian said, after the wireless unit pays off its debt to Verizon Communications in 2011. The wireless business accounts for about 70 percent of Verizon Communications' cash generation.
- see this Bloomberg article
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