As expected, Verizon this week upped both the price of its monthly service plans and the allotments of data those plans offer. And as expected, some of its competitors – namely T-Mobile and Sprint – were quick to pounce.
The nation's largest carrier essentially raised its monthly service fees by $5 to $10 per month while providing more data in each of its plans. Verizon also introduced features that enable users to keep unused data from the previous month and a "Safety Mode" that allows customers to stay connected even after they've reached their monthly allotments, while slowing speeds to 128 Kbps.
But many of the prices and features are already offered by Verizon's competitors, and those competitors wasted no time in pointing it out. T-Mobile CEO John Legere once again took to Twitter to note that – among other things – his company has long offered a data rollover feature through its Data Stash offering.
"If you're going to copy #DataStash, why copy @att's sad version of it?" Legere tweeted. "A copy of a copy = a terrible @verizon version of @TMobile #DataStash."
Meanwhile, Sprint CEO Marcelo Claure trumpeted the service fee hike. "GREAT strategy @Verizon," Claure tweeted. "Step 1: Raise prices. Step 2: Tell them you aren't raising prices. Step 3: Tell them to be thankful. #SwitchtoSprint."
But while the new plans unquestionably mark a price increase, analysts noted that Verizon actually lowered the price per gigabyte of data. And although the move is clearly an attempt to better monetize its customers – "Safety Mode" costs $5 per month for users who aren't on the carrier's two most expensive data plans, for instance – Verizon may be able to continue to leverage its status as the nation's top-performing network operator to do so without losing many customers.
"While Verizon continues to lead the industry in network performance (as shown from numerous third-party studies), in some ways a case could be made with these new plans and offerings Verizon is acting more 'me too' to meet some of the perks which Verizon's competitors are already offering," Wells Fargo Securities analysts wrote in a research note. "While an increase in the monthly recurring charge is a positive for ARPU – with things like Data Rollover and Safety Mode offered – there are more opportunities for customers to be smarter with their data usage and limit the upsell capability of this ARPU."
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