Verizon’s Data Use Pricing Set to Expire, But Executives Weigh Options

(Reuters) –
Verizon Wireless is experiencing a boost in higher-margin wireless data
subscribers thanks to a $10 limited data service it is offering,
potentially encouraging the top U.S. operator to make such an offer more
permanent.

While rival AT&T Inc had
eliminated unlimited data services and been selling useage-based data
pricing plans to smartphone customers for months, Verizon Wireless has
yet to follow suit.

While tiered
pricing with limited data use means heavy data users have to pay more,
lower-level plans are seen encouraging people who have never used data
services to try it out.

Late last
year, Verizon Wireless took a tentative step in that direction with a
$10 plan for data downloads limited to 150 megabytes in a temporary
promotion, which lasts until the end of January.

Chief
Executive Daniel Mead said the offer had helped smartphone and data
service adoption, especially among customers who subscribe to mobile
family plans.

"We’ve been very
encouraged by that. We think it’s helped us in terms of getting more
members of a family using data," Mead told Reuters at the Consumer
Electronics Show.

The executive
said the promotion would end in January but said the company is
evaluating if its success could lead to a more permanent plan.

"We’re considering every option," he said.

Smartphones
and data services have become key to growth in a U.S. market where most
consumers already own cellphones but a smaller number pay for services
such as mobile Web surfing.

At CES,
Verizon showed off 10 new devices it plans to sell in the first half of
this year for a high-speed network it is building based on Long Term
Evolution (LTE) technology. It said the network offers a speeds ten
times or more faster than its older service.

Mead,
who took the top job at the venture of Verizon Communications and
Vodafone Group Plc late last year, said the new LTE service and devices
would help spur increased consumer demand in data.

"We’re
coming into an important phase of growth. I think we’re going to see
customer growth. We’re going to see customer engagement in different
ways," Mead said.

He said the services will also keep Verizon ahead of its rivals, allowing it to hold onto its market lead.

"It’s
going to be a phenomenally competitive offering." he said. "I think
you’re going to see the other carriers are going to have a lot of work
to do chasing us."

(Editing by Lincoln Feast)