Verizon finally rejoins the unlimited bandwagon

Verizon’s new offering is competitive with the pricing of T-Mobile, Sprint and AT&T's unlimited plans. Image: Verizon

Verizon has launched an unlimited data plan as it looks to regain lost subscribers in an increasingly competitive wireless market.

The nation’s largest mobile network operator announced an $80-a-month plan with unlimited talk, text and data for both new and existing subscribers who pay automatically. A second line is $60 more per month, a third line is an additional $20 a month. Four lines cost a total of $180 per month.

Verizon’s new offering includes some restrictions—users may be throttled after they exceed 22 GB of data in a given month, for instance—but unlike some other “unlimited” plans it includes HD video streaming and up to 10 GB of LTE hotspot access.

And Verizon’s offering is competitive with its rivals’ unlimited plans: T-Mobile’s unlimited plan—which includes taxes and fees—starts at $70 a month for a single line and tops out at $160 for four lines. AT&T’s plan starts at $100 for one line and costs $180 a month for four lines. Sprint last week launched a promotion offering five lines of unlimited service for $90 a month, undercutting all of its competitors, but that promotional price lasts for only one year.

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Verizon will continue to offer its existing plans in addition to the new unlimited service, and it continues to plug its network.

“Everything we’ve done is to provide the best experience on the best network—and we’ve built it for the future, not just for today,” said Ronan Dunne, president of Verizon’s wireless division, in a prepared statement. “We also fundamentally want you to have more choice. We’re not limiting you to a single plan.”

The move marks a significant reversal for Verizon, which had long decried the wisdom of unlimited plans even as its rivals embraced them. “You cannot make money in an unlimited video world,” then-CFO Fran Shammo said in September. “You just cannot do it, because you need the cash flow to keep up with your demand.”

Times are changing, however, and Verizon is struggling to compete in a U.S. wireless market in which growth has slowed to a crawl. The operator reported 167,000 net phone additions in the fourth quarter, but it saw wireless service revenue shrink 4.9% year-over-year, and it has warned that figure won’t return to growth this year.

Whether its new unlimited data plan can help Verizon claw back market share—and whether it is economically viable—has yet to be determined.  

“As the last holdout, Verizon's announcement solidifies the industry's move to unlimited pricing,” Barclays analysts wrote in a research note to investors. “While we recognize there are nuances such as customer mix and adoption rates, ultimately the move constricts long-term access growth prospects for the industry. Moreover, it likely adds incremental pressure on the need to drive down network costs. We thus expect initiatives around software defined networking and network virtualization to only intensify. For Verizon, we expect questions on its ability to re-invigorate growth post its 'no growth' outlook for 2017 will remain in place given these recent pricing moves.”