Verizon Wireless's New Plan: So Long Unlimited Data, Hello Buckets?

By  |  Thursday, May 27, 2010 at 5:28 pm

Remember the bad old days, before the advent of unlimited wireless data plans? Well unfortunately, with the vaunted arrival of 4G, it looks like those times might be returning if Verizon Wireless has its way. At the Barclays Capital conference in New York City this week, Verizon Wireless’s CEO Lowell McAdam said he hopes to ditch unlimited plans entirely on the company’s upcoming 4G LTE network, charging instead for “buckets” of megabytes.

McAdam also noted that, after the release of the first LTE-enabled device, Verizon anticipates using its 4G LTE network for voice starting in 2011. It remains unclear, however, whether Verizon’s LTE will also spell the end of unlimited voice calling plans.

Meanwhile, big carriers haven’t even been waiting for 4G to get here before doing whatever they can to increase people’s phone bills. A survey released this week by the Federal Communications Commission (FCC) shows that one in six mobile phone users has been hit by “bill shock,” or an unanticipated hike in their monthly service fee not caused by a change in their calling plan. The majority–or 52 percent–of these “shocks” added $25 or more to the consumer’s monthly bill, with the hikes amounting to $100 or more 23 percent of the time.

Also this week, AT&T–another big carrier now readying 4G LTE services–upped its early termination fee (ETF) on smartphones and netbooks by an astounding $150, from $175 to $325.  For its part, Verizon has already been charging an even higher ETF of $350–or $25 more than AT&T–on Droids and other high-end mobile devices.

By the way, in the very same study released by the FCC this week, 43 percent of the respondents acknowledged that ETFs have represented a “major reason” why they’ve remained with their current carriers. (Yet somewhat ironically, 18 percent of the cellular customers surveyed were apparently blissfully unaware of ETFs at all.)

So, as for Verizon’s future intentions around unlimited service plans, although 4G bandwidth constraints might play some kind of role here, the primary driver is far more likely a old-fashioned desire to boost the bottom line.

The timing of MacAdam’s remarks this week couldn’t have been more unfortunate, actually, if wireless carriers really want to sell 4G services. Many folks are still struggling to pay all kinds of existing bills. Right now, the still impending 4G stands to many as a glittering diversion, a shining beacon of hope for better times ahead.

In the midst of this seemingly endless grim economy, who wants to be brought down ahead of time by thoughts of how much these sparkling new 4G wireless services might cost you in the future?  Verizon Wireless  might find it tough to turn back the hands of time, anyhow. Sprint is about to start selling the U.S.’s first 4G phone, the EVO 4G, and it offers unlimited 4G data–albeit at a $10 premium over 3G. In the wildly competitive wireless services market, how can Verizon abandon unlimited wireless calling plans unless all of its rivals decide to do just about the same?



6 Comments For This Post

  1. Mo Says:

    Why not just get prepaid? There are tons of good prepaid phones out there. They get better and “smarter” ever day. Plus, no contracts, and if you lose the phone, you just buy another one and all you lose is the air time. Paying monthly fees with contracts for phones is moronic. Only a moron or an iPhone whore would think of such idiocy.

  2. misteranony Says:

    He said he hopes to do away with unlimited plans. But, demand will show it’s pretty face and he’ll have to do away with that notion just to stay competitive.

    Just another old croony bent on power. Verizon is already one of the more expensive carriers you can sign up for. They have a fantastic network and a giant subscriber base, so why make a boneheaded move like this?

    Just ask ISPs. Paying per byte just doesn’t work very well long term (or even medium term).

  3. Chris Donahue Says:

    I too have a prepaid phone. I have a LG Vx9800(the V) on Verizon. I barely talk and I occasionally browse the web($1/day) and use it as a GPS($2.99/day).

    The only issue I have is the fact that Verizon and the other carriers allow older phones(pre-HTML web) on prepaid. Hopefully they will allow better phones(closer to a smartphone maybe) on prepaid. For now I will stay with my current phone that I’ve had for 2 years.

  4. Mike Says:

    So the Big bad mobile companies want to start a charge war all over again. I remember when this happened about 5 to 7 years ago. It was a company called World Comm. They were supposed to revolutionize the Mobile marketplace. And suddenly they disappeared over night due to one thing. The economy. If the CEO’s don’t start waking up to reality about what is going on here in the “real world” and stop living in fantasy land where every one is rich or able to afford these ridiculous charges they are all going to find that like the banking structure only one company is going to emerge out of this time frame and that company will be none other than METRO PCS. For two reasons. Affordability, and no ETF. For those of you that don’t realize it, the minute you sign a contract with these companies to get the wonderful and free phone services, they stick you with an ETF that will cost in the realm of $300 to $500 in some cases. The reason for this is because they feel that the phone you are getting is a great product. I believe that the phones are really just an excuse. I can’t believe that the phones cost them over $200 to put together and then it cost them 300 to test and make it profitable which is why these phones cost more than a computer in most cases. Sadly we Americans don’t fight these companies on products like this.

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  6. jessica@data plans Says:

    Well…. I was almost ready to switch from at&t to Verizon, but thanks to this article I don't believe I will. Verizon is about to price itself right out of business. The fact is they should be offering unlimited everything plans and cut the price.

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