Verizon Likely to Follow ATT's Move to End Unlimited Data Pricing

By Reuters  |  Posted 2010-06-05 Email Print this article Print

Analysts believe that Verizon is preparing to end unlimited pricing for mobile data services, following ATT's move to make the change, charging the biggest data users a metered rate. But other carriers such as T-Mobile are unlikely to follow suit right now as they look to gain subscribers.

(Reuters) - Verizon Wireless could be prepared to follow AT&T Inc's (NYSE:T) lead and change how it charges wireless subscribers to download data -- but analysts say other carriers may be better served by standing their ground in the latest pricing upheaval.

AT&T's move on Wednesday to halve mobile data fees for most customers -- but eliminate its unlimited data plan and make heavy users pay more -- created a rash of speculation about what rivals would do. None have revealed their plans.

Analysts are betting that U.S. market leader Verizon Wireless, owned by Verizon Communications (NYSE:VZ) and Vodafone Group Plc (VOD.L), will react by cutting its prices at the low end. It will also pull its unlimited service to help it manage network capacity.

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But AT&T's next-biggest rivals -- Sprint Nextel (NYSE:S) and T-Mobile USA, a unit of Deutsche Telekom (DTEGn.DE) -- are more likely to maintain their unlimited plans, allowing customers to surf the Web as much as they want for a fixed price.

Gartner analyst Phillip Redman said that Sprint Nextel and T-Mobile, because they have been losing subscribers, have more spare network capacity and can therefore lure away any customers that want to stick with unlimited plans. Both operators, however, may still introduce new low-end plans to match AT&T's price cut.

"T-Mobile USA and Sprint are in the same boat. I don't see them changing their top end plans," Redman said. "But they will need to on the low end."

Verizon Wireless, by contrast, has greater incentive to pull back on its unlimited plan, Nielsen wireless specialist Roger Entner said.

"The one that has probably to move the quickest is Verizon ... they're growing and their data consumption is growing substantially," Entner said.

Verizon executives have already discussed the likelihood of moving away from unlimited plans after the operator kicks off service late this year on a high-speed network it is building.


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