When will Verizon Pull Unlimited Pricing?By Reuters | Posted 2010-06-05 Email Print
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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.
Some analysts said Verizon Wireless may wait until it launches the new service to pull away from unlimited pricing. But it will react very soon if AT&T's cheapest plan gains ground.
"Verizon is very quick to respond," Entner said. "If they see in their numbers that the AT&T price change is moving customers to AT&T and away from Verizon, then they'll follow."
The end of unlimited pricing is seen helping profit margins at AT&T and any rivals who follow suit. For instance, AT&T's new $25 plan for 2 gigabytes of data represents a $5 per month revenue cut per user. Yet it will be cheaper for AT&T to support 2 gigabytes of data than unlimited services, which have put a massive strain on its network.
Charles Golvin from Forrester Research said AT&T's $15 plan looks even better from a profit standpoint because it involves supporting 10 times less data than the 2 gigabyte plan.
"The margins are considerably higher for that plan," he said.
While many commentators complained bitterly about the new service pricing, analysts say that it is actually good news for all but the heaviest smartphone data users, which AT&T says represent just 2 percent of customers.
Entner said that on average smartphone users roughly tripled their data downloads in the past year.
Even if usage keeps growing at this rate, most consumers will save money under the new usage-based AT&T plan, he said.
(Reporting by Sinead Carew, editing by Matthew Lewis)
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