Verizon CFO: We will combat heavy data users with overage charges, not throttling

When Verizon Wireless (NYSE:VZ) unveils its new, tiered data price plans for smartphones this summer, the carrier will not cap usage and then throttle speeds when users go over their allotted amounts (as T-Mobile USA does). Instead, the operator will charge users more for every amount of data they use (as AT&T Mobility (NYSE:T) does). "The user that wants to use a lot [of data] will pay for it," said Verizon Communications CFO Fran Shammo at the Barclays Capital Global Communications, Media and Technology conference.

Verizon's tiered data pricing strategy is in stark contrast to that of T-Mobile USA, which yesterday announced several new tiered data price plans for smartphone users. When consumers go over their allotted data amount, T-Mobile will throttle their data speed so they experience 2G-like, or EDGE, data speeds--which likely will be less than 100 Kbps. Earlier this year, however, Verizon said that for subscribers who use an "extraordinary amount of data and fall within the top 5 percent of Verizon Wireless data users," the carrier may throttle throughput speeds periodically for the remainder of the subscriber's billing cycle and into the next cycle.

AT&T Mobility last year introduced tiered data pricing for smartphones, and the carrier levies additional charges to those subscribers who go over their monthly data allotment.

Shammo also reiterated comments he made at a Reuters Global Technology Summit event last week, noting that the company will launch tiered pricing this summer and that unlimited data pricing will go away. "As the market matures, pricing will mature," he said, noting that the company will first launch the tiered price plans and then progress to a family data plan for multiple devices. "But right now we are focused on tiered pricing for the summer."

Regarding the company's LTE network progress, Shammo said Verizon essentially will be finished with its LTE deployment in most of its major markets by the end of 2012. He added that 29 percent of the LTE devices the company currently sells are purchased outside its current LTE markets. He said these customers likely are business customers who travel in LTE markets or are just consumers who are purchasing LTE devices in anticipation of a launch in their market.

Interestingly, Shammo made a few comments about Vodafone's 45 percent ownership of Verizon Wireless and the companies' relationship. He said that, up to this point, Vodafone primarily has been a financial partner, but that the two companies are exploring new ways to work together that are more strategic. For example, he said Verizon and Vodafone could work together to secure more enterprise customers because of the global footprint the two can offer. Or they may begin working together in procurement and product development because they can offer tremendous purchasing power.

For more:
- see this link to the webcast

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