Verizon Delays Its Tiered Pricing Plan Until Apple Launches iPhone 5
Verizon Wireless is reportedly delaying its switchover from unlimited data plans to tiered pricing for new customers until summer, roughly three months behind its earlier projection made last fall. Potential Verizon (VZ) customers who are holding out for Apple's next generation iPhone, which is expected to be released in late June or early July, may luck out and still be able to snap up a Verizon iPhone before the carrier's unlimited data plans go away.
The anticipated summer launch of Verizon's tiered data plans, noted in a Wall Street Journal report, is designed to avoid putting up "barriers" to anyone looking to jump to its service. That decision was apparently a smart move.
When Verizon launched its long-awaited iPhone in mid-February, customers like Ray Leon of Guadalupe, Calif., said the unlimited data plan was enough to prompt him to switch out of the AT&T network and onto Verizon. It wouldn't be surprising to see Verizon wait until Apple (AAPL) launches its iPhone 5 this summer before instituting a move to tiered data plans for new customers.
Reining in Data Hogs
To date, Verizon is satisfied with its iPhone launch, Chief Financial Officer Fran Shammo told The Wall Street Journal. Verizon sold out its preorder inventory in a matter of 17 hours, but foot traffic to its stores was rather light on the first day of selling the iPhone 4 -- even with the unlimited data plans.
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For Verizon and its competitors, the tiered data plans are designed to rein in data hogs, who can drive up operating costs by taxing the networks. Tiered plans are also designed to generate additional revenue to help offset those costs. Last June, telecom giant AT&T (T) switched over to a two-tier data plan for new customers.
Among Verizon Wireless customers, roughly two-thirds of its smartphone or stripped-down cell-phone users are either using the carrier's inexpensive data plan or have no data plan, the report noted. Verizon, however, is anticipating that a significant portion of its users will eventually move over to the iPhone. The thinking is its customers will be willing to fork over $30 to $50 a month for a data plan, though it's still wrestling with the exact price points.
Currently, Verizon customers pay nearly $30 a month for an unlimited data plan. Once that goes away for new customers, it'll be up to Verizon to make good on its claims that a superior and faster 4G network will be enough to draw in new users.
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