Verizon Caves, Launches New Unlimited Data Plan

Facing growing pressure to respond to growing wireless data demands in the U.S. mobile phone market, Verizon finally relented. The company on Sunday announced its own unlimited smartphone option while keeping alternatives open for lighter data users.

Verizon’s new introductory plan provides unlimited data on smartphones or tablets, along with unlimited texts and phone calls, for US$80 per month. The deal is restricted to customers who sign up for autopay.

The Verizon plan includes HD video streaming, mobile hotspot service, calling and texting to Canada and Mexico, and 500 MB a day of roaming in those countries.

Customers also will have the option of adding a connected smartwatch, GizmoPal or other connected device for $5 a month, or an overseas TravelPass allowing up to 500 MB per day for $10 a month.

Customers will get 10 GB of 4G LTE data per month, and 3 GB after that, the company said. After 22 MB of data usage, Verizon may “prioritize” customers in the event of network congestion.

“We’ve built our network so we can manage all the activity customers undertake,” said Ronan Dunne, president of Verizon’s wireless division.

Verizon customers who don’t use a lot of data will have other options, including 5G small, medium and large plans, he said.

Bad Business?

Verizon, one of the leading wireless carriers in the U.S., has resisted offering unlimited plans for years — last month, it even ran a full page ad touting the fact that it didn’t have to so.

Most customers did not need unlimited plans, former CFO Fran Shammo told a Goldman Sachs investor conference last fall, warning that unlimited plan abusers can “wreak havoc on your network and hurt cash flow.

All of the competing firms with unlimited plans eventually would show “cracks in the armor,” as tests showed problems due to the high usage of video under those plans, he also warned.

Verizon claims to have the nation’s largest 4G LTE network, covering 2.4 million square miles and 314 million people.

Resistance Was Futile

Verizon was forced to react to competing plans because new customers were choosing its competitors and some existing customers were jumping ship, suggested telecom analyst Jeff Kagan.

“It was never a matter of it, only when Verizon Wireless would do this,” he told the E-Commerce Times.

T-Mobile, considered the market leader in terms of promoting unlimited plans, reported last month that it added 8.2 million net customers in 2016, marking the third year in a row that it added more than 8 million customers.

Told You So

The CEO of T-Mobile took to his familiar practice of throwing shade on Twitter, blasting Verizon for coming late to the party.

OMG. FINALLY. Only took @Verizon 4 years to realize customers don’t want limits. #bouttime #yourewelcome

— John Legere (@JohnLegere) February 12, 2017

Verizon’s unlimited plan “might be the most expensive ever,” Legere also tweeted, and he suggested they might want to include taxes and fees, as T-Mobile does.

Legere returned to social media Monday afternoon to announce that T-mobile would one-up Verizon by throwing in HD video and 10 GB of hotspot data.

6/ Starting Fri, #TMobileONE price includes HD video & 10GB high-speed 📱hotspot data all at no extra charge. AND taxes & fees are included!

— John Legere (@JohnLegere) February 13, 2017

The Verizon bashing didn’t end with T-Mobile, as Sprint piled on.

“Not much we can say to speculate on Verizon’s decision making, except they’re likely trying to catch up to Sprint,” said John Votava, spokesperson for Sprint.

“Verizon said time and time again that customers don’t need unlimited. Now they’ve changed their tune,” he told the E-Commerce Times.

The Sprint unlimited plan offer allows customers to get unlimited talk, text and data for $50 per month, Votava said, noting that the deal is available until the end of March.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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