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You Should Be Scared of Verizon’s Shared Data Plans [Opinion]

 

Verizon’s CFO Fran Shammo spoke at the JP Morgan Media and Telecom conference this morning, providing further detail on their plans for shared or family data tiers. During his conversation, he mentioned the end of grandfathered unlimited data plans, but before that he talked specifically about these shared tiers. While he didn’t go into detail on how they would be priced or structured as far as data amounts go, he did say that Verizon will have no problem making money off of them in the very near future. 

Here is the quote:

We want the connections to come in and the way we’ve designed our plan, this plan is built on tiers. And as we look at the future growth of LTE consumption because of the speeds and video consumption and consumption of other end-to-end type devices, it’s going to be more important that people will start to upgrade in the tiers as they start to really realize the benefits of the LTE network.

So two things here. One is, revenue will continue to grow as we get into data shared plans and people start to connect more devices (as my pad example). And then over the future time, as they add more devices, they are going to have to buy up in tiers. So again you will see the revenue increase there.

The way we designed this, we really shouldn’t see a short term decline.

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As I’m listening to him say all of this, my jaw slowly dropped to my desk and remained there for a few minutes. Investors and shareholders are probably ecstatic that Shammo feels this way, however, what about us, the consumer?

To me at least, all I took from this conversation was that these tiers have been researched and built so perfectly, that you and I will be forced to purchase up in them. There will be a base of sorts that your family can nibble on, but as we continue to realize how powerful LTE is and decide that we want to connect more and more devices to it, that we will also be forced to pay more and more. These weren’t created to make your life simple, although that may be one of the selling points. No, these were created with the idea that as data consumption grows, you won’t have a choice but to pay more to get more data to use. Welcome to the future of mobile data.

Look, again, I get that this is a business for Verizon and they need to make money. But with that said, the upgrade fees, online bill pay fees, ending of “New Every Two” deals, removal of 1-year contracts, and of course unlimited data have become a bit much. The scary thing is, that Verizon won’t be the only one to make this move. You can jump ship if you don’t like it, but don’t expect that your next carrier will avoid the shared data model for long. Verizon didn’t create this as a test, they created it to be the future.

I guess there hasn’t been a better time to upgrade.

  • Paul


    as we continue to realize how powerful LTE is and decide that we want to connect more and more devices to it, that we will also be forced to pay more and more”

    Didn’t we already do that? We had to pay $30 per device originally, so if you wanted another device that you’d lightly use, you’d have to pay $30 more per month for data alone. It sucks that unlimited data is gone, but this could end up being a lot cheaper for someone who wants multiple devices than anything they offer now – or even the old unlimited plans, depending on how many devices someone owns.

  • http://www.facebook.com/lydia.cottiers Lydia Beatty Cottiers

    I have a question-I’m currently with Verizon (family plan-no data) and am considering adding a data plan. At this time, there is no longer unlimited data being offered. When is the new plan going into effect? Will this be a “shared” data plan? Meaning will one price of data be shared by everyone on my family plan. Currently I’d have to purchase a data plan per line. I am considering leaving Verizon for Sprint, or one of the non-contract companies (Virgin, Boost, etc.) What do you all think? Any info?

  • Nathan Rieland

    I’m imagining $45 for 2GB shared data. What do you expect to be the three base tiers?

  • Cellphone Fiend

    I have 3 phones on family share, each with unlimited data at $30 each. If I lose unlimited data I am simply going to drop data altogether and just use talk and text. I lived before data on my phone and I will live without it. Plus I will save $90 per month. I already bought 3 Verizon discontinued LGVX9900 off e-bay in new condition at an excellent price. If Verizon stops the unlimited, I stop paying for data. And if they decide to keep the unlimited then the LGVX9900 will go into my collection……don’t ask why I have a collection.

  • http://www.techmantis.net/ Minja Miketa

    If this happens I am leaving Verizon. They ONLY reason I am not on a GSM carrier is because of the unlimited data, and sure verizon has great service. I go to Europe annually and getting a GSM phone will solve that for me as well…I will see how it goes and my next Nexus might be GSM Nexus.

  • http://twitter.com/MrUniq78 Christopher

    I’ve actually wanted shared data for years but with these tiers Verizon and all the wireless carriers are gonna f*ck it up for everyone. Y’know if they offered decent caps, I wouldn’t be concerned..but they won’t. Somebody needs to sue these companies before they will be reasonable and who knows when that will happen.

  • Bret Farris

    I’m already paying $220 a month for two phones with grandfathered in unlimited data plans. If that bill goes up again, I’m dumping the smart phones all together. Wi-Fi is everywhere so, I can just use that. And if they end my unlimited data plan, that voids my contract and I will leave anyways.

  • Wyatt

    Might as well go back to having a basic phone now…

  • skzion

    Why are so many comments being hidden?

    If Verizon ends grandfathered unlimited data, I would be free to go for deals to new subscibers of other services. One can’t get free phones anymore doing this, but the savings would be substantial. Also, if one’s preferred phone were not on Verizon, one could move.

    No, this news is not good. Still, I wonder if Verizon has quite thought this through.

  • http://twitter.com/DeibyQzda Deiby Quezada

    Well, I will wait for Verizon prices before I make a decision. My wife and I currently share a family plan and we are paying like $60 a month for our data plans (2GB on both phones), and if Verizon gives us 4GB for around $30 for me will be a sweet deal since we very rarely go over 3GB (combine), been my self the biggest data consumer.

  • Positive HxC Go

    Maybe it’s me, but I have no problem paying $500 for a phone off contract (I usually change phones once a year). I don’t think they’ll be able to touch my unlimited data that way. When they do, it won’t be much of a problem as I won’t have an early term fee to go elsewear if there are better options out there. Renewal discounts are a joke.

  • mikeym0p

    But since all the carriers are hurting the consumer, I’m considering AT&T (or T-mo when they get international bands) if I can’t have the best service I’m at least getting the unlocked device I want.

  • mikeym0p

    I feel like it’ll just cycle back down again, once all the carriers ditch unlimited data and they all have LTE they’ll need something to compete. So they’ll start to offer cheaper and cheaper data packages and either beat our usage or reach unlimited again. Once the LTE roll out is complete on all the carriers it’ll be a repeat of the 3g competition of coverage, speed and price.

  • LMI500

    Corporation greed over consumer need!!!!

  • C-Law

    Leaving verizon after 12 years when my gnex contract is up. Hello Google play store phone purchase and unsubsidized monthly plan from T-Mobile!

  • Sm1tty300

    So if I read this right they want everyone to get an I-Phone not to upgrade to a nice new Android. Sounds like other back yard deals.

  • Jarred Sutherland

    Since greedy corporations are all alike and all carriers will adopt this option in the near future, I suppose it’s either put up or shut up. Shut up in this case being to shut up your wallets and switch back to a basic phone with basic features at best. I am tired of being pushed, looks like the dumb phone will be a future device for me.

    Oh well, my tablet works just fine for me on wifi.

  • nozkcb

    The good news is the market will eventually come to some sort of equilibrium balance and the companies will have to adjust to be competitive. They can’t all screw us because customers will just stop buying the overpriced service they’re selling. Natural market forces should (fingers crossed) eventually fix this. Well, unless the government gets involved. . . . then we’re all screwed.

  • Tony Allen

    This upsets me greatly, what upsets me more greatly are the people who’re threatening to jump to Sprint.

    Sprint will soon either:
    A. Go bankrupt. B. Get rid of unlimited, and go the same/similar way as Verizon’s
    You’re all fooling yourselves if you think jumping carriers is going to get you away from this disease. Proving a point, so you can what?

    What are you all going to do when Sprint announces 6 months out, after Verizon enacts this, that they’re doing away with unlimited data as well, forcing everyone onto tiers? Do you honestly think switching to another network, just to fall for the old bait-and-switch is worth it? There’s a reason Sprint is holding out onto their ‘true unlimited’ waiting til absolutely everyone else does away with unlimited data, wait for the flood *trickle more likely* of new customers, then slams you with tiered data. It will happen.

  • jawtab

    leaving verizon the solution? I doubt AT&T has better data coverage. OR am I wrong??? At least that get cool phones first Verizon sure does get the old dumpy looking stuff.

    If reception is descent on the Samsung Note, I’ll switch to ATT for that sweet massive screen!

  • Mordecaidrake

    I just don’t understand this logic, okay now I can only use 2gb say of data, which I’ll kill listening to pandora on the way to and from work. So they’ll say ‘use wifi more’ what the f is the point of the phone if I have to use wifi? I might as well dump having a smartphone. Hell using an hour of GPS will probably use more than 1gb of data so there goes the navigation as well.

  • ostensibly

    I don’t understand why people will pay increasingly exorbitant rates for (for most people) non-essential services like streaming music and watching tv/movies. I’m sure research indicates a consumer desire for more wireless data capacity, but the value of the service vs. cost is losing ground for me.

  • Bamajag

    BOHICA

  • Epell

    I dont get this, how are they gonna avoid lawsuits?
    Does the law protect consumer from company changing terms of contract without consent?

    I feel like they will just really sweeten the deal on shared data plan to lure customers away from unlimited data plan.

    • http://www.facebook.com/profile.php?id=500058631 Bernard Silver

      They aren’t changing mid-contract. It will happen either when your contract expires, or when you upgrade (say after 20 months) and then sign a new contract. (And there is also all the discussion if data is really part of the contract but I won’t go there!).

      Mobile contracts have been different from a number of others, in that carriers have allowed people off contract to continue on the original terms and price. Many/most things are not like this, the point of those contracts is to get a fixed price for a fixed term, at contract expiration things can get repriced. This move looks like the first step towards that type of model.

      • http://www.facebook.com/profile.php?id=500058631 Bernard Silver

        Actually, hard to know without more details! Some articles suggest that (for now) you will only have to change if you move to 4g.

  • Martin Nilsson

    They will most likely screw you over but if done right – why not? Lets just say you pay $1o for 5 GB of data. Getting a second phone or tablet would demand you to pay another $10 just for data. You could of course with a shared plan simply split your 5 GB of data over the two devices or you could go to the next tier. Lets say you pay $15 for 10 GB of data. Done right it could improve it even for the customer. But as said, the company will most likely feed it self first…

  • angermeans

    How is it greener when sprint doesn’t even have LTE and won’t for years (at least one of decent size)? Not to mention since getting the iPhone sprint has struggled even getting half a mega bit down and much less up. You can have unlimited data bu I it is slow why would you want it. Don’t worry as sprint is only a few months off of ditching their nlimited as well and I bet it hits bout the time they get their first couple LTE markets launched

  • Carlos Fernandez

    So let me get this straight. I have now my Motorola Droid X which I got in December 2010 and my contract expire in December 2012 I was holding to renew my contract for a really good phone and when I heard the news about Google opening the Nexus program to multiple manufacturers at a time, selling it directly through Google Play Store I said Hell Yeah I’m waiting until that. But my question is if I upgrade now to a 4G phone before the Shared Data Plans get active will I keep my Unlimited 4G Data or is going to get axed anyways?

    • florious80

      That’s the exact question I’m wondering right now as well. It is currently hard to say what Verizon will end up doing until more is revealed by this blog and others. My advice is to upgrade now (or just before this takes place) to at least lock into 2 yrs of unlimited. They can’t change the grandfathered plan whose contract is still active at the time of this change. But beyond that who knows. Or maybe they’ll be real evil and literally dump everyone off of unlimited but allows everyone to terminate contract immediately. T.T

  • Jwhap

    I would have been pissed if they would have said they were raising the price of unlimited data 20 bucks for existing grandfathered customers but I would have paid it. I would have been pissed….but I would have paid it.

    Luckily my wife is on T-Mobile (been a customer for 14 years) and with Google selling off contract phones on the play store I will close my 3 lines (1 unlimited data, 1 feature phone line, and my 4g line for my tablet) and I will sign up under my wife’s line. Sadly the 4g tablet data, I never use because I am always on wifi with the exception of vacations. So I pay for stuff I don’t generally use anyway.

    Apparently Verizon does not need my money and I will take it elsewhere. I moved to Verizon to snag unlimited data on the most reliable network and upgraded to 4g to keep it on a 4g phone. They do not get that people will leave.

    I also had cancelled my netflix subscription when that fiasco went down. I am a principal voter when it comes to my money and where it gets spent!

  • CapnShiner

    I agree that the carriers(not just Verizon) are getting greedier and greedier but I do think that being outraged by this is sort of a knee-jerk reaction. We don’t know what the pricing is going to be yet. I am not expecting it to be low or even reasonable, but we still don’t know. I am also wondering if all this only refers to family plans. They keep talking about share plans and that doesn’t really make sense when applied to an individual plan that only has one line on it. I’m hoping that it does only apply to family plans.

  • http://www.ashevilletechnologyservices.com Dan Brown

    There is a possibility this is only in response to the impending iPhone LTE release. To prevent anyone upgrading to a 4G iPhone from having unlimited… just what the CEO of AT&T just said he regrets most.

    We still don’t know if us grandfathered current 4G LTE users will continue to be grandfathered… here’s hoping.

  • autocannon

    Well I suppose that I’ll be going back to a dumb phone then. I’ll still get the Verizon network, but I’ll be paying them less money. I can live with a WIFI only lifestyle.

  • Tired of it

    Greed…

  • moozicmon

    The minute they take away the grandfathered unlimited plans is the minute I buy an unlocked phone and say goodbye to contracts forever. Oh, and if they ever pull that stunt there’ll be no ETF to pay as it changes the terms and conditions of the original contract. Really, it would be one of the dumbest moves they could make… which is saying a lot all things considered…

  • John

    The US market is saturated; there’s no more customers to woo onto cellphones – everyone who wants a cell phone has one. There are only two ways for the telecoms to raise money now – steal customers from another carrier, or milk their customers for more.

    • AE35

      and clearly verizon thinks of us as cows.

  • Sporttster

    Figures they’d pull this BS. I just got Dish network and they’ve got a Remote app that I can get all their programming remotely and I’m finally starting to use some of the friggin data I’ve been paying out the nose for and now they’re gonna pull this. Well go ahead and ramp it up you jerks. Make us pay more. I can just as easily go back to a dumb phone and I’m sure many others will, too, and THEN where will your new, shiny LTE network be? This isn’t gasoline. I don’t NEED a super phone….better remember that….

  • Bionic

    When im doing anything data hungry im on wifi anyway. Me and my wife only use about 1 GB per month together. So if 2GB cost 30 each or better yet, 45 total, we’re fine.

  • Bionic

    You people are fooling yourselves if you think ATT and Sprint wont get rid of unlimited data as well. Everyone keeps saying ill jump to sprint, well guess what, they are gonna do it too, eventually.

  • Knlegend1

    The price has to be right…period. If 2 to 3gbs makes my bill lower than $100 then I’m sold.

  • Edward

    Friends,

    I just created a petition: Verizon Wireless: allow unlimited users on 4G to keep unlimited data for another upgrade, because I care deeply about this very important issue.

    I’m trying to collect 100 signatures, and I could really use your help.

    To read more about what I’m trying to do and to sign my petition, click here:
    http://www.change.org/petitions/verizon-wireless-allow-unlimited-users-on-4g-to-keep-unlimited-data-for-another-upgrade?share_id=vDqjSzsUaQpe=pce

    It’ll just take a minute!

    Once you’re done, please ask your friends to sign the petition as well. Grassroots movements succeed because people like you are willing to spread the word!

    edward

    • Sporttster

      Not gonna upgrade if they’re gonna make me pay more than I already am for what I’ve got…forget it. I’ll keep my Razr…

    • AE35

      Petitions don’t work. Wanna scare Verizon? Call your Federal representative. Politicians fear disgruntled constituents and carriers fear regulation minded politicians.

  • me

    It’s either going to be like what he said: people buying into the higher tiers or the opposite: people are going to use less and less data and maybe get rid of their smartphone/connected devices.