SubscribeVerizon Wireless has a problem with customers who look for the cheapest possible plans for their most capable phones. Those days are over, as the company introduces ‘mandatory’ data plans for customers using what they define as “enhanced multimedia phones.”
Going forward, phones that meet these four qualifications will be defined as such:
Enhanced Multimedia Phone
- “Enhanced” HTML Browser
- REV A
- Launched on of after September 8, 2009
- QWERTY keyboard
The first phone to achieve this distinction is the Samsung Rogue, due for release on September 9th.
Customers who try to purchase this, or other phones that “qualify” for this status will be required to choose either a service plan that already bundles “unlimited data” (defined as 5GB per month), or choose from one of these mandatory add-on plans:
A-la-carte data – No usage allowance — $1.99/megabyte
25 megabytes per month — $9.99/month
75 megabytes per month — $19.99/month
The one option not available to customers is a block on all data services, to prevent any billing at any of these prices.
Verizon Wireless' Data Pricing "Refresh" (Courtesy: Boy Genius Report)
What will also no longer be an option is the $15 VCAST Vpak add-on, providing streaming video and includes unlimited data. Customers signing up for VCAST Vpak before September 8th will be grandfathered in and be able to keep this add-on. After September 8th, customers will find a $10 VCAST Video on Demand package on offer instead. It provides unlimited video access, but no data allowance. Customers will have to buy one of the add-on plans mentioned above.
Verizon Wireless’ internal marketing slides, leaked to The Boy Genius Report, speak to Verizon’s motivation for making these changes — money. One slide notes that “over 60% of new activations would require a data plan next year” if the customer wanted access to both data and video on their new phone. Additionally, the change “alleviates HTML capable handset subsidy pressures,” which essentially means they will be able to sell a more advances handset for less money, knowing they’ll make up the difference with a mandatory data plan charged over the life of a two year contract.
Marketing Slide Shows Verizon Pushing Customers to Unlimited Data Option as a Better Value
Verizon defends the changes by noting prior to the mandatory data plans, customers who used their browser-capable phones had to either pay the $1.99/megabyte a-la-carte rate, choose a premium unlimited data plan, or get VCAST Vpak. The company feels the 25 and 75 megabyte options may work for customers with light usage, but enough that would bring their data usage over five megabytes per month ($10 on the a-la-carte option).
Realistically, this is another example of a data provider providing consumption billing options at ever-greater pricing. With the loss of the VCAST Vpak option, consumers are now pushed into more expensive options, and will likely be heavily marketed bundled services that include data, just to avoid the pricey mandatory 25/75 megabyte add-ons.
Customers should anticipate marketing of bundled plans and little, if any, mention of the “a-la-carte” option that does not add a monthly fee to the customer’s bill. Indeed, the slides obtained from BGR don’t show the a-la-carte option at all on the “Choosing the best plan” slide. Instead, it pushes customers to the unlimited data option “for just one penny more” for customers choosing the popular second level Verizon Wireless Select plan (with the data plan add-on), which includes 900 talk minutes.
Verizon Select's Popular 900 Minute Option, Before the $9.99+ data add-on becomes effective.
Some Verizon Wireless customers relive better days, as they remain grandfathered on truly unlimited data plans chosen before the era of usage caps. It’s just additional evidence that when usage capped broadband hits the scene, it’s only a matter of time before prices increase, and the usage cap allowances decrease.
Other stories of interest:
- Wireless Data Plan Cap Relief? Sort Of
- Wireless Broadband: A Bountiful Garden of Consumer Choice, Pricing, & Plans… Not
- AT&T Refuses to Lower iPhone Data Plan Rates: Company “Happy” With Pricing
- Rochester Business Journal Survey Finds Western NY’ers Overwhelmingly Opposed to Tiered Pricing Plans
- Verizon Business Introduces Tiered Pricing… Based on Speed – On Demand Bandwidth
Wow. Just….wow. I mean I didn’t like Verizon to start with because every time I pulled up their pricing and compared it on a spreadsheet with Sprint, T-Mobile, and AT&T for all the usage and features I wanted they never came out on top. For me Sprint has always been the most pocketbook-friendly even if their coverage is less than stellar.
To put it another way: I have a “smartphone” with a $15/mo unlimited data plan, my wife’s smart phone with shared minutes and 300 txt messages each for less than $90 per month. Verizon can’t touch that. Granted I have been on the same plan for several years and there’s no forced upgrade path so I’ve been able to maintain about the same monthly price for a long time with Sprint but I know new customers there too have to deal with mandatory data plans for certain phones (like the Samsung Instinct and the HTC Touch Pro). The nice thing (if you can call it that) is with Sprint any data plan meets the requirements, not just their “Everything” plans.
How Verizon continues to keep customers with their restrictive, abusive, and phone-feature-disabling (Wi-Fi? nope, GPS? nope, same RAM and proc? nope, smaller/more puny) behaviors is beyond me.
I’m not too surprised to see this happen, but I am pretty shocked to see this happen. Those kind of caps for the price are way too low, even for locked down phones. Heck my two DSL lines which cost me $56 a month, giving me a total of 4Mbps/768kbps of bandwidth if I run both lines maxed out and give me unlimited usage of the data give me a better value for the buck, not to mention much lower latency coming out of fiber optic fed remotes. Of course when I need data on the go, I’ll have a PSP or an iPod Touch handy so that I can tap into the free Wi-Fi many places typically have (even if it is on an overloaded T1). I pay for basic phones with a handful of minutes, with no text service, no data service (heck I had Verizon disable the get-it-now store for my plan since I never used it) and the bill can still get pretty epic at times. I have a 4 year old plan as well, which is better than the plans you can get now a days when it comes down to it.
But still, I’m surprised. Verizon has a cell phone tower near my home which is being fed by fiber optic cable directly from the Verizon CO. There is another cell phone tower nearby here which Frontier is fueling with several T1 lines, and a few more which can be considered “repeater” towers. At least this marks down the fact that Verizon will not get me onto a data plan, ever considering the caps anyways.
My next phones if I don’t decide to get basic phones and choose a smart phone instead, will of course get jail broken as soon as they’re activated if at all possible. Way more possibilities of apps (see the iPhone).
You may want to revise your post. You suggest that the Enhanced Multimedia Phones can choose from one of three options, including “A-la-carte data – No usage allowance — $1.99/megabyte” but that is no longer an option. Check out the first graphic in your post and you’ll see that the $1.99 a-la-carte plan is “Not Available”. Getting rid of the a-la-carte option and forcing the customer to buy a monthly data package was the whole point to Verizon’s updated pricing. The even nuttier part of this is that it doesn’t matter if you buy the phone second-hand or if you just wanted the phone just for texting you still have to buy the data plan and it will be automatically added to your bill without notifying you if you ever activate one of these phones on your account. You also can’t activate a PDA phone made within the last year on your account, even if bought second-hand, without having a $29.99 or higher data plan slapped on your account, again without notifying you.