Verizon: No immediate plans for tiered data pricing

Wireless data revenues for the country's two largest operators, Verizon (NYSE:VZ) and AT&T (NYSE:T), continued to be the growth engine for the wireless businesses of both companies in the second quarter.

Verizon, which added 1.4 million subscribers in the second quarter, announced that retail data revenue was up 23.4 percent to $4.7 billion, a jump from $3.9 billion last year. Average revenue per user grew almost a percent to $51.56 last quarter with monthly sales from data plans increasing 19 percent to $17.85 per customer.

During a conference call with analysts, John Killian executive vice president and chief financial officer of Verizon, said Verizon has no immediate plans to migrate to usage-based data pricing plans, refuting a rumor that Verizon could be launching a tiered pricing plan as early as this week on the heals of AT&T's move in that direction. However, Killian said Verizon is studying the possibility of adding such plans for 3G. It's clear that the operator will launch tiered pricing for LTE when it launches its 25 to 30 markets by the end of the year.

For AT&T, which added 1.6 million net subscribers, wireless data revenues increased to $4.4 billion, up $936 million from the year-earlier quarter. The number of AT&T subscribers with wireless data plans was up 24 percent over the previous year. The company activated 3.2 million iPhones in the quarter, its largest number of quarterly iPhone activations ever. The carrier said around 27 percent of those activations were customers new to AT&T.

AT&T CFO Rick Lindner said that early results from the company's move to tiered data pricing plans have been encouraging. In particular, he said the company had expected a lot of customers to migrate to the lower price point ($15 per month for 200 MB of data) but a large portion migrated to the $25 per month for 2 GB of data plan. In addition, he said AT&T is seeing benefits from lowering the point of entry so customers can move into the integrated device category and try data services. "We believe over time they will migrate to higher-tiered plans," he said.

Another important segment analysts are beginning to hone in on is the connected devices segment, which is expected to drive growth in the coming years. In that category, AT&T outpaced Verizon, noted Ken Hyers, senior analyst with Technology Business Research (TBR). Verizon added 264,000 machine-to-machine (M2M) and connected device connections, which includes services such as business telematics and consumer offerings such as eReaders. Meanwhile, AT&T added 896,000 connected device connections in the quarter thanks to sales of Amazon's Kindle and the Barnes & Noble Nook eReaders, Hyers said.

"TBR believes that connected devices represents one of the most significant new growth markets for mobile operators and believes that AT&T is much more aggressive in this space than Verizon Wireless," Hyers said.

For more:
- see this this FierceWireless article
- read this Connected Planet article
- see this other FierceWireless article

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