Golden Age Of Unlimited Data Downloading Nearing End?

Consumers may be in the last days of the Golden Age of Unlimited Data Downloading as other carriers follow Verizon’s lead and reconfigure the way they charge users who are increasingly using smartphones -- and other devices such as tablets -- for activities other than simple phone conversations, which have fast become a quaint relic of other recent centuries. (Ever try to get a teenager to respond to a phone call?)

The plan Verizon is rolling out looks good on the surface to consumers who have multiple devices as it allows them to “pay for a certain amount of wireless data and share that allotment across their family’s smartphones, tablets and laptops,” as Brian X. Chen writes in the New York Times “Bits” blog. 

But, as Chen points out a little further down in the story, there may be “repercussions for customers who are clinging to unlimited data plans.” Bottom line: if current unlimited data customers want to keep their current billing arrangement when their contracts are up, they will either have to stick with their “old” smartphone or pay the full market price for a new one. 

The plan, which is dubbed “Share Everything,” will be available starting June 28. USA Today has a Q&A answering common questions such as “can I keep my old plan?” (yes) and “I just want a phone to make phone calls; are these plans going away?” (The answer is “almost” –- at least on Verizon. “There will be only one plan for basic phones. It costs $40 per month and gives you 700 minutes of calling. Texting and data will cost extra.”

“The point of this is customer flexibility and value,” says Verizon spokeswoman Brenda Raney. “If you have a smartphone and you don’t have a tablet, but you’re at the beach one day and your friend has a tablet, you can activate it right then and there because it’s included in the data plan.”

Verizon explains the plan here.

"What I'm doing is giving you the flexibility to share the data you've paid for," CMO Tami Erwin tells Reuters’ Sinead Carew. "Customers who are using more than one device will very quickly see the value in this."

But Ovum analyst Jan Dawson tells the Times’ Chen that “Verizon is finally delivering something that everybody wants -- in a way that nobody wants. There are people who want a shared data plan and minimal voice and text messages, and that just isn’t available.”

And here’s how Anton Troianovski and Thomas Gryta interpret the development in the Wall Street Journal, which is not known as a bastion of consumerism: “After years of waging a price war, the largest U.S. wireless carriers have reversed course and are adopting a series of changes that in many cases raise costs and reduce consumers' options.”

Wall Street (and Verizon’s main rival, AT&T) is applauding the announcement because they see it as a potential windfall but “some customers voiced disappointment that Verizon wasn't making smartphone ownership more affordable,” Troianovski and Gryta write. They talk to a stay-at-home dad in the Pittsburgh area who is deflated that the new plan will not enable him and his 11-year-old daughter to “jump onto the smartphone bandwagon."

Further down, in a Q&A of their own, Troianovski and Gryta provide an answer to “why Verizon is doing this”: “The U.S. wireless market is saturated and after years of competing on costs, wireless carriers are now trying to boost revenue by charging customers more for their data use. They're also trying to convince consumers to connect more devices to the wireless network.”

The hed on Roger Cheng’s CNET story reads: “Why Verizon's shared data plan is a raw deal.” One big reason is that it is geared toward families –-“particularly ones in which a few members don't use as much data” as tech-savvy individuals such as he himself might.

Sanford C. Bernstein & Co. analyst Craig Moffett sees what’s developing as a huge competitive advantage for the already big big-boys: "In a household with two or three AT&T or Verizon devices -- say, a smartphone and a tablet or two, and one device from T-Mobile or Sprint...Sprint doesn't stand a chance." 

As everyday citizens –- and the nation’s economy -- become as dependent on the Internet as it has been on superhighways since the end of World War II, I wonder if there won’t be a increasing agitation for subsidizing a cyberhighway system as it did the building of the superhighways infrastructure (and the early Internet). There are many potential potholes and possible repercussions on the road to guaranteeing everyone low-cost access to the most vital arteries of the future, but I suspect it will be a cause that will be gathering some cudgels.

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1 comment about "Golden Age Of Unlimited Data Downloading Nearing End?".
  1. Paula Lynn from Who Else Unlimited , June 13, 2012 at 10 a.m.
    It cuts into disposable income and falls into a category like death and taxes...but more like death that costs more. Economically, for all the increases of that income is necessary to be directed to communication delivery services, the less invested into growth of all other businesses. $40, $50 + per month that is not saved for emergencies or retirement, cannot be spent on dentists or healthy food. Do the arithmetic for $35,000 annual income gross for a family and see where this goes. Minimum wage becomes less than minimum.