Verizon Wireless (VZW) stated that their operating revenues in Q2 were up to $27.5B. They claim to have 2.2M new additions – I was even one of them. But while they are attributing these newcomers to the iPhone and their stable of LTE devices, I believe a majority switched for another reason. It was widely published that VZW was going to drop their unlimited data plans and switch to tiered plans only. These tiered plans come with prohibitive costs ($80 for 10GB) and severe overage charges. The plans offered are 2GB, 5GB and 10GB ($30/month, $50/month and $80/month).
Many people are okay with 2GB of data right now – but I foresee in the future with more video streaming (and wider LTE coverage) – that 2GB will not suffice for long. And I find the costs for 5GB or 10GB to be outrageous. This is why I joined – I had come from the Sprint network with WiMax 4G (with fully unlimited data). Right now, the LTE network is faster than the Comcast “broadband” in my house – yet the LTE is limited. We are a data-centric society – yet VZW is making their plans in a fashion that will throttle data moving to devices.
Of further concern to the consumer (and especially the enterprise user) is the networks attempt to make VoIP inaccessible. One of the hallmarks of a 4G networks is using data to push voice instead of the analog voice networks. Services such as Viber or Skype offer true VoIP calling – how will Verizon and AT&T deal with them? VoIP can be a huge boon to enterprise IT – providing instant and secure communication for global workers (saving international fees), but will data caps prove VoIP impractical?
VZW is already known for throttling the bandwidth of the highest consumers – it now seems as if they are also trying to punish anyone who desires a lot of data (all while bragging about their shiny new LTE network). I know many people who switched to Verizon just to avoid the tiered plans – and all over the internet there was a big “awareness” push for people to switch (or grab a data plan) before the changes. So what will be the eventual fall out? There are a few devices forthcoming that might draw a large crowd (ie the iPhone 4S and the Droid Bionic), but what will be Verizon’s newest plan when people don’t want to use their inferior 3G network (lets face it CDMA EVDO Rev A is a LOT slower than all the HSDPA offerings) over their competitors? Verizon was right to push their LTE offerings as quickly as they did, but if they continue to rely on CDMA as the true backbone of their network, they place themselves in a precarious position as the GSM cell carriers may merge – but also roll out LTE networks of their own.
The change to tiered data plans (following those by AT&T and T-Mobile) leaves Sprint as the only domestic post paid carrier offering unlimited data plans (Virgin Mobile even has them). I am all for plans that are tailored to those who need less data – but at the end of the day, this is an example of Verizon charging a surplus, for the same old services. Verizon and AT&T are already the costliest carriers and this price gouging doesn’t seem to be stopping anytime soon, but I am just glad I got in on the unlimited data party before it ended.