With Verizon Wireless' (NYSE:VZ) elimination of its unlimited smartphone data plan, the nation's two largest wireless carriers are now capping their subscribers' monthly voice minutes, texting messages and smartphone data usage--and are charging overage fees when subscribers surpass their monthly allotments. However, the way Verizon and AT&T Mobility (NYSE:T) are handling overage alerts for voice and texting isn't very friendly or helpful.
For example, Verizon Wireless announced its smartphone subscribers will receive free text message alerts when their data usage crosses thresholds of 50 percent, 75 percent, 90 percent, 100 percent and 110 percent of their data plans' monthly allowances. AT&T Mobility (NYSE:T), which ended its unlimited smartphone data plan last year, employs a similar tactic: The carrier sends text notifications when subscribers reach 65 percent, 90 percent and 100 percent of their monthly data threshold.
But when it comes to voice minutes and text messages, neither Verizon nor AT&T provide usage warnings. So if a customer subscribes to a monthly postpaid plan with 450 anytime minutes per month, for example, that subscriber will not be warned when they use up 449 minutes in the month. The same goes for text messages: If a subscriber reaches their monthly allotment of 200 text messages, for example, they are not alerted about it. (AT&T said it provides text-based alerts when customers incur around $15 to $20 in total overage charges on text messaging plans. Isn't that nice?)
Sprint Nextel (NYSE:S) doesn't warn its subscribers of impending overage charges either, but T-Mobile USA does. The nation's fourth largest wireless carrier alerts its Even More Plus subscribers when they get within 45 minutes of their voice minute limit for the month, and then again when they go over their allotment. T-Mobile doesn't provide alerts for text messages, however, or for plans other than Even More Plus.
(U.S. Cellular appears to be one of the only carriers bucking the trend in this area: The operator's Overage Protection offering sends a text to users who reach 75 and 100 percent of their voice minute or text message buckets.)
To be clear, there are plenty of ways for customers to find out if they're approaching their usage limits, from calling #BAL to checking a smartphone app to visiting their carrier's website. Further, there are other service options, including unlimited services and prepaid services, that remove the need for usage alerts. But that's not the point. Subscribers should be alerted before they go over their allotments. Not after.
(Of course, I'm not the only person to raise this issue--the FCC is currently collecting comments on this very topic.)
Voice and text overage alerts are "completely possible. It's not a technical issue," said Current Analysis analyst Peter Jarich (a Fierce contributor). However, he said that, since data is a newer service than voice and text, there's a bigger need for data usage alerts.
"I think that's why you're seeing this for data and not for voice," he said.
When I asked representatives from the Tier 1 carriers why they don't offer pro-active usage alerts, most explained that there are a range of ways for subscribers to check their own monthly voice and text traffic.
Concluded AT&T's Elizabeth Gautier: "Voice and messaging are understood products. And users that message at volume should and tend to select an unlimited plan."
From a business standpoint, I find the whole situation totally ridiculous. Usage alerts--those sent before one incurs overage charges--are a common courtesy that anyone in their right mind would want, myself included.
Moreover, I think it's pretty clear why carriers don't provide such alerts: Because they get money from overage fees, and if they warn subscribers about possible overage charges, then those subscribers likely will limit their usage. It's a cheap trick and it probably works great (carriers generally don't disclose how much money they make from overages).
Will the advent of pro-active usage alerts on smartphone data--where carriers send out alerts before subscribers go over their allotments--prompt the nation's wireless carriers to provide similar alerts for voice minutes and text messages? So far it doesn't seem like they will. But if one of the major players breaks from the pack and offers this service, it could represent a major selling point.
Indeed, as Amdocs' Guy Hilton pointed out, pro-active, real-time alerts could even lead to extra revenues.
"For example, you might receive a text message notifying you that if you send 10 more text messages during the next five hours you will receive a bonus of 30 minutes for free," said Hilton, director of the billing vendor's product marketing for revenue management.
More importantly, pro-active usage alerts would show that wireless carriers are interested in actually providing fair service to their customers, rather than sneaking extra money out of their pockets. --Mike