Verizon Wireless (NYSE:VZ) has not yet decided on pricing options for its LTE smartphones, but Verizon Communications CEO Ivan Seidenberg said the company's higher-end data plan could serve as a template for the offerings.
Speaking at the UBS Global Media and Communications Conference, Seidenberg said it is important that Verizon "get some experience and learn" about what works best for LTE data pricing before making any changes. However, he said the company's $80 plan, which offers users 10 GB of data per month, "looks to me like a floor of what people will do."
"The trick is not to price too high that you scare people off the service, but price high enough that as applications and services start to fill in people will use it and see the value," he said.
Verizon currently offers 5 GB of LTE data for $50 per month or 10 GB of data for $80 per month on either a two-year contract or a no-contract basis; both options carry a $10 per GB overage charge. Verizon's two USB LTE modems--the LG VL600 and Pantech UML290--cost $99.99 when subscribers sign a two-year contract, and cost $250 in a month-to-month scenario. Verizon launched LTE service Sunday in 38 markets and at more than 60 airports, covering 110 million POPs.
Seidenberg warned against lowering prices too quickly in the still-nascent market for 4G services. "We have to hold firm as best we can until the entire environment is mature enough where we have devices and services so that people can see the value," he said.
Looking ahead to 2011, Seidenberg said that every month for the next two years Verizon will light up additional LTE markets, so that by the end of 2012 85 percent of the country will be covered. Seidenberg said that starting in January and going through June, Verizon will launch a series of LTE devices. The company will pick up the pace of its LTE device launches in the second half of next year, he said.
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