Verizon drops unlimited voice prices, overhauls data plans

Verizon Wireless slashed prices on its unlimited voice plans and streamlined its data plan packages. During a conference call with analysts and reporters this morning, Verizon Wireless CEO Lowell McAdam said that, now that the integration of Alltel is complete, the company wanted to simplify its rate plans for customers and add more efficiency to the organization.

Specifically, Verizon said it is reducing the number of plans from 40 to six single line plans and eight family share plans. Here's the breakdown on the unlimited voice and text plans:

  • Unlimited voice is now $69.99 per month, down from $99 per month
  • Unlimited voice and text will cost $89.99 per month
  • Unlimited family share voice plan (two lines) is $119.99 per month
  • Unlimited family share voice and text plan (two lines) is $149.99 per month

The company also made changes to its prepaid voice plans. Prepaid monthly unlimited talk is $74.99 per month (just $5 more per month more than the postpaid plan). And prepaid monthly unlimited talk and text is $94.99 per month.

On the data side, Verizon said it placed its portfolio of devices into three categories, and will offer data plans specific to those devices: 

  • 3G smartphones. These are CDMA EV-DO Rev. A-based devices that provide customers with Web browsing and applications from app stores, and include BlackBerry, webOS, Android and Windows Mobile platforms. In 2010 Verizon will have about 20 additional smartphones on its roadmap. For 3G smartphones, there is a $30 per month data package that provides unlimited data.
  • 3G multimedia devices. These offer HTML browsing, have applications based upon Qualcomm's BREW platform, offer music services and navigation. They are data capable, but not high end. For 3G multimedia devices, the data package required is a $9.99 monthly plan that provides customers with 25 MB of data and gives them access to mobile email, games and the Internet. The $19.99 per month package for 3G multimedia phones has been discontinued.
  • Simple feature phones. These are 1xRTT devices that offer talk and text. These are for entry level users who don't want more features. For feature phones, users are not required to have a data plan. However, they can purchase either the $9.99 per month plan or the $30 per month plan, or they can opt for just being charged $1.99 per MB of data they use.

"On the surface some of the rate reductions are quite stunning as they reflect a 30 percent reduction in rates," wrote Pali analyst Walter Piecyk. "For example, Verizon previously charged $100 per month for unlimited voice but will now only charge $70. We doubt there were many customers paying $100 for voice only service given that there are prepaid plans available for half that rate. It is also questionable whether $70 will attract new customers given that customers can access Verizon's network for $45/per month through Straight Talk, who has been ramping up its advertising."

As for the traffic the changes could generate, McAdam said the company is not concerned about offering an unlimited data plan to its smartphone users. "Our network is strong on a day-to-day basis," he said. "There has been a lot of speculation about usage caps. We don't feel we need to worry about that at this point.

    He wouldn't say whether tethering a smartphone to a laptop was included in the $30 unlimited plan, but he did say that Verizon would be making further announcements regarding tethering in the future.

    Verizon's action comes amid FCC scrutiny into the firm's recent tweaks to its early termination fee (ETF) policies. In December, the FCC sent a letter to Verizon asking the nation's largest carrier to explain its "advanced devices" ETF, which raises the pro-rated fee to $350 for devices including netbooks and some smartphones. Earlier this year, FCC Chairman Julius Genachowski said Verizon Wireless' response to the agency's inquiry into the fees "raised more questions than it answered," comments that could protend further FCC action on the topic.

    For more:
    - see this Pali post (sub. req.)
    - see this press release
    - see this WSJ article (sub. req.)
    - see this Reuters article

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