Verizon's Shammo: 'You cannot make money in an unlimited video world'

Fran Shammo
Verizon CFO Fran Shammo

T-Mobile and Sprint have recently rushed headlong into unlimited data – with some notable restrictions – but Verizon remains steadfastly opposed to unlimited plans. For now, at least.

The two smaller major U.S. operators last month streamlined their price plans, announcing new offerings that include unlimited voice, text and LTE data. And AT&T launched an unlimited data plan earlier this year, although that offering is available only to subscribers of DirecTV.

Those plans may not appeal to most mobile users, though, Verizon CFO Fran Shammo said this morning, and they risk network congestion from increased traffic by users who consume massive amounts of data.

“At the end of the day, the majority of people don’t need unlimited plans. But the people who use unlimited plans can be abusive; they can really wreak havoc to your network,” Shammo told attendees at an investor conference. “You cannot make money in an unlimited video world. You just cannot do it, because you need the cash flow to keep up with your demand.”

Shammo also noted the restrictions that T-Mobile and Sprint impose on their unlimited plans. Both carriers offer basic unlimited plans that limit video delivery to 480p, for instance. And while both operators have since introduced premium unlimited plans, even those come with some restrictions.

“If you look at the unlimited plans, after you get done reading the 75 asterisks of what you don’t get – we want to be simpler for our customers,” Shammo said, citing Verizon’s latest plans that are more expensive than its previous offerings but also include more data.

Shammo, who will soon retire after 27 years with the carrier, didn’t entirely close the door on unlimited, however. If the new unlimited offerings from T-Mobile and Sprint gain traction among consumers, Verizon could counter, he suggested.

“We’re going to look at our competitors very, very closely,” Shammo said. “We’re going to respond where we need to respond.”

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