UPDATE: Corrected the pricing to reflect the 10GB and 8GB plans, VZW graciously noted that I was off by $10.00, and they were very much correct! Fixed.
I’m a five-line subscriber with Verizon. Currently, we have two smartphones with unlimited data legacy plans, and three “feature” phones with unlimited text. We all share a 1400 minute airtime plan which includes a feature called “Friends and Family”—effectively, we pick ten popular callers and add them to this list, and the calls to these numbers don’t count against our overall tally. With that in mind, we average 350 minutes a month; the remainder of the minutes do not roll over. Oh, also, guess what? If you drop below 1400 min on your plan, Friends and Family doesn’t apply. So, onto the minutiae…
The primary line, a smartphone, was up for renewal and an upgrade. In speaking with multiple reps, I discovered that the $250.00 we pay today for all lines, insurance on all phones and all taxes/royalties/etc, would go up significantly. I have these ordered in terms of Most Expensive to Least Expensive changes.
- Option A: Share Everything Plan, 10GB… this has been marketed as the way forward for a number of Family Plan users with Unlimited Data. My wife and I consume an average of 4GB each a month today, so we would need at least an 8GB plan. Minutes and text across all lines are unlimited. “Dumb” phones are $30.00 monthly, smartphones are $40.00 monthly, and the data plan pricing sits on top (in this case, 8GB is $100.00). 32% increase
- Option B: Share Everything Plan, 8GB… All lines unlimited minutes & text. 6Gb shared for the two smartphones. (This is important, watch.) 28% increase
- Option C: “Amortized” Pricing… change nothing, purchase new smartphones at cadence of 1 device per year. (Any upgrades for the feature phones are eliminated from this example as it would be the same across all examples.) At an average of $600.00 for a device.
- Option D: All lines share 1400 minutes, unlimited text. 5GB data per smartphone. 16% increase
||Share Everything (10GB)||Share Everything (8GB)||Amortized (Full-Price Phone / Same Plan)||Individual Data (5GB x 2 lines)|
You might ask, “Well, where’s your incentive? WHY are they doing this?”
The argument from VZW (and other carriers) is simple: People who use over 1GB of data are limited, and over 2GB, you’re in a scarce minority.
The truth? Several blogs have re-evaluated these marketing figures since 4G’s prevalence has flooded the various markets and carriers.
Guess what? On average, the HSPA+/LTE/WiMax user consumes at least 36% more data than a 3G user. At least, and that number is going up all the time. Why? Let’s assume that the user doesn’t change their behavior at all—most streaming services, unless you consciously elect a specific setting, will upscale to match the bandwidth. YouTube, Pandora, Netflix, Hulu… all yes. So, are you doing anything different? Nope. Are you using more bandwidth? Sure!
AT&T and VZW–in effect, a duopoly, given their coverage and capability when compared to all other US domestic carriers–have not come to terms with what this means, and appear to be in a transitional marketing/costing state that costs the user more. Sprint, the coattail-hanger, is banking on this selling point, and offers unlimited data FOR LIFE. However, they don’t have a great overall footprint outside of metro areas. So what’s great about Sprint? It’s for life, and Softbank acquired 76% of them in July of this year. They’ve bought out the balance of Clearmax (WiMax’s daddy) and are committed to increasing their capability across the board. T-Mobile is cheaper, but only deceptively so, given that they have a new (and awfully cool, if you’re okay with the pricing) BYOD structure that reduces the plan cost by about 40% from the norm, while allowing the user to either purchase or amortize the device cost at their leisure.
What does all this mean? It means that we’ll likely see a re-evaluation of plans and pricing in another year or two, especially as you see VZW begin to invest in the advancedLTE footprint (AKA “5G”). It means that, if you paid less before for unlimited, you’ll pay significantly more now for a smaller slice of the pie that you may or may not have used. It means that the carriers are still learning. Biggest meaning? It means that we pay and pave the way for this learning curve.
Verizon and AT&T—you have the footprint, the infrastructure and the wallet for it. Be the first ones to truly fix this mess, or you may see a larger “churn” (customer loss) % in the coming years to your smaller brethren.
…and me? I’ll probably have to go to Option D. I have 5 kids, and while I’d like to use the amortization notion, standing on principle doesn’t always work when you’re faced with principles or pizza night in the Watt household.