Verizon intros new 'Ultimate' 5G monetization plan

Verizon is joining T-Mobile in introducing a new premium service plan in an effort to wring more profits from new and existing customers.

The move comes as Verizon expands its speedy midband 5G network with more C-band spectrum. Verizon has said that its customers with C-band connections subscribe to its most expensive service plans in greater numbers than other customers.

The new plan from Verizon raises the possibility that AT&T will also introduce a new premium plan. AT&T, T-Mobile and Verizon – the nation's biggest 5G providers – often move in lockstep when it comes to pricing and sales strategies.

The new pricing developments among the US operators are in response to rising levels of competition and a shrinking number of new customers. The companies invested billions of dollars into their 5G networks and are now struggling to find ways to ensure that those investments pay off.

Verizon's Unlimited Ultimate gambit

Verizon overhauled its 5G pricing strategy in May to focus on its new "myPlan" options. The company's Unlimited Welcome myPlan costs $65 per month for one line of service, while its Unlimited Plus costs $80 per month for a single line of service. The main difference between the two is that Unlimited Welcome doesn't give customers access to Verizon's speedy "ultra wideband" midband 5G network, which uses C-band spectrum.

Later this week, the operator will add a third option: Unlimited Ultimate, for $90 per month for a single line of service. As noted by Cnet and Droidlife, the plan includes access to Verizon's "ultra wideband" 5G network. It also offers more mobile hotspot data and more international data, alongside other goodies including discounts for connected devices like smartwatches.

The new Ultimate plan also supports Verizon's myPlan option to add "perks" like a subscription to Disney+ or Apple One for an extra $10 per month. The introduction of the plan comes days before the expected introduction of Apple's next iPhone.

The ARPU game

Just a few weeks ago, Verizon announced second quarter results that showed a loss of 136,000 postpaid phone customers in its consumer business. However, the company offset those losses with gains among business customers.

The losses demonstrate that Verizon is struggling to maintain its position against its rivals, according to some analysts.

"Verizon's 40% market share is unsustainable in a four-player market," wrote the financial analysts at New Street Research in their assessment of Verizon. "Their premium price will also be difficult to sustain, given waning product differentiation. The most benign scenario would see Verizon maintaining price, and posting relatively stable subscribers, with share falling gradually as the market grows."

However, Verizon officials have said that around 70 percent of the operator's new customers sign up for its most expensive service plan. Now that Verizon's most expensive plan costs more, presumably the operator will be able to squeeze more money out of new customers who subscribe to the Ultimate plan.

That will likely help Verizon increase its average revenue per user (ARPU), a key metric used in its pursuit of 5G monetization and profits.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano