Verizon, AT&T Dig In for Battle of the iPhone Plans
Designing an attractive set of service plans for a new device isn't always easy for wireless carriers, and as Verizon gears up to launch its own iPhone, the plans it offers could make a big impact on how many new users it manages to bring on board. Meanwhile, AT&T may offer new plans and even new functions to keep its own hordes of iPhone users from turning toward its biggest competitor.
Jan 27, 2011 5:00 AM PT
As Feb. 10 nears, more information is coming regarding the pricing plans Verizon Wireless will offer customers who use the iPhone, which the carrier will make available on that date. Meanwhile, AT&T appears to be reworking its own plans, perhaps in a bid to convince some users not to run into the arms of its arch wireless rival.
On Tuesday, Verizon Chief Operating Officer Lowell McAdam told The Wall Street Journal that the company will offer iPhone buyers a US$30 unlimited data plan -- for now.
Meanwhile, reports have surfaced that AT&T Wireless has let some subscribers to its limited iPhone plans return to its unlimited plan if they had subscribed to it previously.
Perhaps AT&T's doing this to prevent iPhone customers from switching to Verizon, but that remains speculation.
"If people aren't reaching the limits of their wireless plans, unlimited plans may not be much of an enticement," Josh Martin, a senior analyst at Strategy Analytics, told MacNewsWorld. "Those who use unlimited data plans probably didn't leave them in the first place."
What's in a VZW Plan?
iPhone owners on Verizon Wireless will have to subscribe to one of the carrier's basic nationwide calling plans and get an unlimited data plan on top of that.
The data plan, which costs $30 a month, is currently an all-you-can-eat offer.
However, it will be eventually terminated, and Verizon will implement tiered pricing plans like those AT&T offers to iPhone subscribers, McAdam said. He didn't provide details of those plans, and Verizon Wireless did not respond to requests for comment by press time.
Further, iPhone owners on Verizon's network will be able to make their devices function as hotspots that can handle up to five additional devices. This will cost them an extra $20 a month on top of the basic and unlimited data plans.
That $20 will get them 2GB of data per month, but this is a separate data pool, meaning they can't tap into the unlimited data plan for which they're already paying $30 per month. If they need more data for the hotspot feature, it'll cost them $20 per gigabyte of additional data.
AT&T offers iPhone owners on its network two plans. The DataPlus plan provides subscribers 200 MB of data for $15 a month. The DataPro plan costs $25 a month for 2 GB, and subscribers have to fork out $10 per additional GB of data. Some long-time iPhone users were grandfathered into larger data plans when AT&T rolled out the tiered system last year.
For DataPro plan subscribers, there's no upper limit as to how many additional GB of data can be bought at $10 per GB, AT&T spokesperson Mark Siegel told MacNewsWorld.
AT&T does not offer hotspot capabilities, but it lets DataPro subscribers tether another device to the smartphone if they pay an extra $20 a month. This lets them draw from the 2GB data pool for which they already are paying $25 a month.
Although AT&T has never allowed smartphone users on its network to employ their devices as wireless hotspots, that may change.
"We're looking at this," Siegel said when asked if the company might change its stance on hotspots. "We haven't made a decision yet."
More Plan Changes on the Way?
AT&T and Verizon may further alter their plans as they battle to lure iPhone-craving wireless subscribers.
Verizon's McAdam reportedly sees the company's unlimited data plan as a lure to AT&T iPhone customers to switch. He also expressed disappointment that Verizon added only 955,000 new subscribers in the past quarter, as stated in its fourth-quarter earnings report, which was released Tuesday.
"Consumers are doing more with their phones in terms of content consumption, and unlimited plans can be seen as a competitive advantage or disadvantage, depending on which side of the fence you're sitting on," Strategy Analytics' Martin pointed out.
It's not yet clear how many iPhone owners will likely jump ship from AT&T to Verizon. But for now, AT&T's not admitting to any.
"Verizon hasn't offered the device yet," AT&T's Siegel remarked. "There are no customers to lose."
Sorting Out the Mess
Just how much data makes up 1 GB? It's sometimes hard to tell while using a smartphone, and some consumers may get a shock when they get their wireless bills once they are hit by a tiered plan.
"It's been challenging for consumers to understand how much bandwidth the app they're using consumes," Strategy Analytics' Martin said. "The tools to help people understand that still aren't in place."
Wireless carriers should create these tools, Martin opined.
"I've heard a lot of lip service from carriers in terms of making it easier to understand their plans," he pointed out. "They really should be providing these tools; if they don't, someone else will."