Verizon to phase out most existing phone plans
Tuesday, June 12, 2012
NEW YORK (AP) — Verizon Wireless, the nation’s largest cellphone company, is phasing out nearly all of its existing phone plans and replacing them with pricing schemes that encourage customers to connect their non-phone devices, like tablets and PCs, to the Verizon network.
The revamped plans let families and other subscribers share a monthly data allowance over as many as 10 devices — the biggest overhaul in the price of wireless service since the cellphone became a mainstream device. The idea is likely to be copied quickly, at least by AT&T Inc., which has already said it is considering introducing shared-data plans soon.
For Verizon, the approach reflects a desire to keep growing now that nearly every American already has a phone.
In the first quarter of this year, phone companies, for the first time, reported a drop in the number of phones on contract-based plans, which are the most lucrative. To keep service revenues rising, companies are betting on increased data usage, and that means getting more data-hungry devices on their networks.
Verizon’s new “Share Everything” plans, announced Tuesday, will become available June 28. They include unlimited phone calls and texts and will start at $90 per month for one smartphone and one gigabyte of data.
If used only with a smartphone, “Share Everything” prices are lower than for current plans with unlimited calling and texting, but higher than plans with limited calling and texting.
The plans will push many subscribers toward spending more by including unlimited calling and texting by default. Unlimited calling plans provide peace of mind, but not many people need them, and the average number of minutes used is declining.
From Verizon’s perspective, offering unlimited access is an efficient use of its network, because calling and texting take up little capacity. Data usage, on the other hand, consumes a lot of network resources.
The savings will come to subscribers who add more devices to their plans. In such cases, the new pricing system will be cheaper compared with separate data plans for each device.
Under “Share Everything,” adding a tablet to a plan will cost $10 per month.
Verizon’s limited calling and texting plans will disappear, except for one $40-per-month plan intended for “dumb” phones. Verizon is keeping its limited-data plans for single non-phone devices, like the $30 tablet plan.
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