Verizon Wireless Lowers Prices for Unlimited Service
Verizon Wireless announced significant price reductions for those customers looking for unlimited monthly service. The new rates will be available January 18 for new customers. Existing customers can also change their rate plans as of that date with no penalty or contract extension.
The major changes announced iclude:
- Price for unlimited voice plan drops from $99.99 to $69.99
- Unlimited voice + text drops from $119.99 to $89.99
- A $9.99 data plan will be required for new activations on all 3G multimedia phones. These are phones, such as the LG enV 3 that provide a better data experience but don’t have an operating system that would qualify them as smartphones.
- Monthly prepaid plans will be available for $5 more than comparable postpaid plans. Examples include $44.99 for 450 voice minutes to $124.99 for the unlimited voice + text listed above.
MyRatePlan Analysis: This plan structure is similar to one introduced by T-Mobile a couple months back and is another step toward the day when there will basically be one plan for light users and unlimited for everyone else. Verizon maintains a premium over T-Mobile pricing, although the difference will shrink considerably. Perhaps perceived differences in network quality were not enough for consumers to justify paying $99.99 for a service that was available for $50-60 everywhere else. Since AT&T pricing structure was almost identical to Verizon’s, that carrier will likely be forced to modify rates in the weeks ahead.
Some of the revenue loss from this new pricing, to the extent it isn’t recouped by gaining market share, will be offset by the new $9.99 data plan requirement on 3G multimedia phones. Currently, Verizon (and all national carriers) require a data plan on smartphone/BlackBerry devices that is roughly $30 a month. Verizon is the first carrier to push that requirement onto this next tier of phones. Since this list includes most of the popular Verizon phones, the effect is that almost all new Verizon customers will be required to have a data plan.
The new prepaid monthly plans provide a way for customers reticent to sign a contract to get full-blown service for about the same price as contract customers. However, as is usually the case, we expect the phone prices to be significantly higher. It also isn’t clear yet whether all phones will be available for no-contract service. If they are, it will be a significant improvement from the limited inventory currently offered. It is interesting to note that while T-Mobile offsets the higher phone cost of no-contract by having its plans priced $10 LESS per month than contract, Verizon’s new structure will still have prepaid priced higher than contract plans.