Entner: Shared data pricing has arrived


It was often and long enough promised and now Verizon Wireless delivered: Shared data pricing is here in a bigger and bolder version that anyone thought. In a radical departure from the world of a patchwork of single line plans glued unevenly together, the new plan arrives in a totally and holistically shared world.

From June 28 the days of metered voice calls and messaging are gone because they are unlimited. The only thing that matters is what and how many devices the customer wants to share and how much data all devices combined will use. Depending on the device and its capabilities, customers pay for these devices to access the network and for how much data all devices together will use. Smartphones are $40, basic phones $30, laptop and notebooks $20, and tablets $10. Data packages start at $50 for 1GB, $60 for 2GB, $70 for 4G, additional 2GB blocks cost $10. The more devices and higher the usage the greater are the savings that can be realized through the ShareEverything plans.

It is a bold move for the technologically advanced premium customer segment. It eliminates the thousands of permutations of how many wireless plans there could be and replaces it with a vision of simplicity taken straight from the disruptive unlimited providers. It also signifies an end-game move in the mature voice and messaging segment and indicates that differentiation in these segments is limited to non-existant. It adds what really matters to consumers and carriers alike: Flexibility about connecting devices and sharable raw data usage that includes free hotspot functionality. The days of separate data buckets and therefore payments are being replaced by one fungible data bucket.

There is no doubt that over time ShareEverything, or whatever else the other carriers will call their version of this plan, will become the standard of how Americans will buy wireless service. The question is if this plan in its radical nature is too soon, too far. As this is the plan that is the banner advertising, new customers might get the impression that the entry level price point at Verizon is $80 per month for a basic phone plus 1 GB of. This would be quite the departure from today's 450 minute, 75 MB, 1,000 message package for $60 for a basic phone. To address this issue, Verizon is keeping two entry level price plans for new customers. A $40 package with 700 minutes, pay-as-you-go messaging, and no data, as well as a $80 package for light data customers with unlimited voice and messaging and 300 MB data. Both plans represent a better value than their current corresponding plans. This should mitigate the impact on the customers that are not ready yet to jump onto the ShareEverything train. Existing customers can keep their plans

The philosophy behind this plan is a radical departure from the past, hence it takes some time to getting used to. The names and prices for the menu items have changed, but for multiple device accounts the overall price will go down, for single device non-unlimited customers the price will go up. This was a deliberate trade-off that Verizon made in the certain expectation of a more connected future. At the same time, this makes customer education critical.

AT&T which has led smartphone price plan innovation for the last several years took a wait-and-see approach. It could have launched its own share data plan ahead of Verizon. It is pretty certain that AT&T will launch its own shared data plan as it watches the situation as the dust settles. Sprint, on the other hand, has the hardest time to respond to this shift in the market. Sprint is differentiating on single device unlimited data plans and in a shared world this limits its options. The ability to provide a discount on a second unlimited plan can be costly. A differentiation away from unlimited data would rob Sprint its unique differentiator.

Roger Entner is the Founder and Analyst at Recon Analytics. Recon Analytics specializes in fact-based research and the analysis of disparate data sources to provide unprecedented insights into the world of telecommunications. Follow Roger on Twitter @rogerentner.  

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