Commentary

Pushed To Its Limit, Verizon Offering Unlimited Data Plans

There was a limit, after all, to just how long Verizon could withstand the pressure of its rivals offering unlimited data plans. Starting today, it will, too.  

Verizon eliminated unlimited data plans from its offerings in 2011. And just last month, Verizon CFO Matt Ellis said the company “didn't feel like it needed an unlimited plan to compete with AT&T, T-Mobile and Sprint, but ‘we continually monitor the market and we will see where we head in the future,’” ZDNet’s Larry Dignan reminds us. 

It monitors the stock market, too, of course. 

“Verizon shares have dropped about 2.3% over the past 12 months, compared with a 78% surge for T-Mobile and a more than threefold gain for Sprint Corp., which has also been aggressively pushing unlimited plans,” Bloomberg’s Crayton Harrison observes.

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“Verizon might not be facing an immediate crisis, but it doesn't want to drive any more customers to a fast-growing rival,” writes  Jon Fingas for Engadget, pointing out that the company had  disappointing subscriber growth in the fourth quarter. 

“The new plan is a stark change in strategy for Verizon, which has spent years trying to get customers to pay for data based on usage and recently raised prices on certain fees,” writes Ryan Knutson for the Wall Street Journal

Verizon, in fact, got itself embroiled in a seemingly unnecessary PR gaffe just a month ago when it told a small group of customers who were on legacy unlimited data plans and habitually used more than 200 gigabytes a month to choose another plan or be disconnected. 

The new Verizon Unlimited introductory plan — which runs on the “best 4G LTE network in the country,” according to the release announcing the change of heart — provides unlimited data on an individual’s smartphone and tablet as well as HD video streaming, Mobile Hotspot for 10 GB of 4G LTE data (3G speeds after that), calling and texting to Mexico and Canada and up to 500 MB/day of 4G LTE roaming in Mexico and Canada.

“Verizon added that after 22 GB of data usage on any one line, the company might ‘prioritize usage behind other customers in the event of network congestion.’ Verizon added that it would maintain its existing data plans for those who didn't want unlimited data," writesCNBC’s Javier E. David. 

“At $80 a month for a single smartphone, Verizon’s new unlimited plan is only $10 more than a current Verizon plan that includes just 4 gigabytes of monthly data. By comparison, T-Mobile is selling unlimited data for $70 for one line, including taxes and fees,” the WSJ’s Knutson reports in a story illustrated by a chart with all of the major competitors’ deals for single and family unlimited date plans.

“Many analysts had predicted Verizon would not offer an unlimited plan because it has relatively less available spectrum per subscriber than the smaller carriers. Customers on unlimited plans will likely use more data than when they were limited to just 5G or 10G per month, which would cause crowding on Verizon's network,” reports Aaron Pressman for Fortune. “But the carrier said it had added enough advanced equipment to handle more traffic.” 

The announcement “comes a few days after rival wireless carrier Sprint introduced a promotion for its own unlimited data offering. But that plan has a catch: the promotional pricing ends after the first year,” reports Steven Musil for CNET. “The cost of Verizon's plan will not go up after a year, a Verizon spokesman said.”

“Unlike our competitors, the price is the price,” the spokesman tells Musil.

And the reality is the reality.

“The move by Verizon was ‘inevitable,’” said Roger Entner, a telecom analyst with Recon Analytics. He had expected Verizon to begin offering unlimited wireless plans, but the company's announcement comes ‘a bit earlier than expected. But only by months, not by years. ... They are fighting back hard,’” report Mike Snider and Eli Blumenthal for USA Today.

Or, as Forbes contributor Mark Rogowsky puts it in his lede: “Poke the bear long enough, and the bear will wake up.”

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