As expected, Verizon increases prices, raises data allotments, intros data carryover and throttling

Verizon today largely confirmed reports that surfaced last week, announcing new pricing plans that essentially raise its monthly service fees by $5 to $10 per month while at the same time providing more data per month. The carrier also introduced its "Carryover Data" service that allows customers to keep last month's unused data, and "Safety Mode" that allows customers who travel over their monthly data allotment to stay connected, albeit at 128 Kbps speeds.

The company also said it redesigned its My Verizon smartphone app "from the ground up" to include the new features.

Verizon billed the announcements as its efforts to "transform your wireless experience," though many of the prices and features are already offered by Verizon's competitors. For example, Verizon's new monthly service prices – which go into effect tomorrow – are roughly equal to AT&T's existing prices, and are slightly more expensive than T-Mobile's prices. And AT&T and T-Mobile have both been offering rollover data plans for close to a year, and both operators allow customers to roll over more than one month of data. As for Verizon's "Safety Mode," both Sprint and T-Mobile already offer similar speed-throttling features geared toward removing the threat of overage charges to customers who travel over their monthly data allotments. However, Verizon noted that its throttling service is optional to customers.

Most notably, though, Verizon continues to raise its service prices in a market where others, such as Sprint, have been cutting prices.

Nonetheless, Verizon used its announcement to trumpet its network, coverage and services. Interestingly, during its media event to announce the new services, the carrier took specific aim at Sprint. Verizon's Mike Haberman, vice president of the carrier's network support, pointed to Sprint's latest advertisements that note Sprint's network is roughly 1 percent less reliable than Verizon's network, but Sprint's pricing plans cost 50 percent less than Verizon's service prices. Haberman said that a 1 percent difference from Verizon equals 5 billion additional service failures a year, or roughly 10,000 service failures every minute. "1 percent is a big deal," he said.

Other noteworthy statistics to arise out of Verizon's media event included the fact that its customers used an average of 2.7 GB of data per month in April 2016, up from 1 GB in April 2013. And Nancy Clark, Verizon's senior VP of marketing, told the WSJ that around 10 percent of Verizon's customers were paying overage charges – a notable statistic considering Verizon's new "Safety Mode" essentially removes overage charges.

As for Verizon's new plans, the carrier said it is offering 30 percent more data now through its plans. For example, its Small plan now offers 2 GB for $35 per month, up from $30 per month for 1 GB. And Verizon's XX-Large plan now offers 24 GB per month for $110, up from 18 GB for $100 per month. The carrier is also offering free roaming in and calling to Mexico and Canada.

Safety Mode is available for free on Verizon's XL or XXL data plans, but customers on the carrier's S, M and L plans must pay an extra $5 per month to receive the service. Customers can purchase additional high-speed data for $15 per month for 1 GB. The same pricing scheme applies to Verizon's new Mexico and Canada calling services.

Safety Mode and Carryover Data both are applicable to accounts rather than specific lines of service.

"What this comes down to is that there's very little growth left in the traditional parts of the wireless industry, and as such revenue growth has to come from increased revenue per user," noted Jan Dawson, analyst at Jackdaw Research and a FierceWireless contributor. "At the same time, smartphones are nearing saturation, and so the revenue growth that's come from people adding data plans to their accounts is also almost over. In general, we have an increasing bifurcation between AT&T and Verizon, which are largely using their own or third party prepaid brands to compete in the most price-sensitive segments, and Sprint and T-Mobile, which are more willing to engage in price wars with their postpaid brands. Both of the larger carriers have resisted engaging in too much price competition with their postpaid brands, because that's a downward spiral that's really hard to pull out of."

Verizon's plans will be available tomorrow, though existing customers can remain on the carrier's old pricing plans if they wish. Customers can move among Verizon's new plans without penalty.

Finally, Verizon also said a version of the new plans is available to small- and medium-sized businesses.

For more:
- see this Verizon release
- see this WSJ article

Related articles:
Verizon reportedly plans to increase service plan pricing
Verizon promises 'fireworks' next week amid rumors of carryover data, 'safety mode' unlimited service
AT&T to offer rollover data for Mobile Share Value customers
T-Mobile launches rollover data program, gives customers 10 GB for free to start
Verizon will kill 'grandfathered' unlimited data plans, push users to data share

Article updated July 7 to clarify the nation of Verizon's "Safety Mode" throttling service.

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