No Surprise: Verizon Talks Tiered Pricing for LTE
Verizon Wireless 's likely move to a tiered pricing model with Long Term Evolution (LTE) should come as no surprise to anyone that has followed its plans for mobile broadband in the last couple of years.
As far back as April 2008, Verizon Wireless CTO Tony Melone was saying that the days of unlimited data plans were numbered. "You will not see unlimited flat-rate pricing on data, in my opinion, in the future," Melone said in a CTIA interview back then. (See There's a Hole in My Data Bucket and Tony Melone, CTO, Verizon Wireless.) Click on the video below to see:
Melone has been consistent on this on issue, telling The Wall Street Journal this year: "As much data as you can consume is the big issue that has to change."
Other Verizon executives have been more circumspect but admitted that a change to unlimited plans could come with LTE. "It's worth thinking about something that is usage-based, but nothing has been decided yet," Tom Sawanobori, VP of network strategy at Verizon Wireless, said on a call in March. (See AT&T, Verizon Undecided on LTE Pricing.)
Thus, Verizon Communications Inc. (NYSE: VZ) CEO Lowell McAdam's suggestion at an investor conference this week that people will buy buckets of data by the megabyte for the various devices they have on an LTE network shouldn't be too much of a shocker.
"I expect people will have four or five or perhaps even more devices they will connect to the network," McAdam said, according to The Financial Times.
The price of running data over the network will drop, however, possibly making the raw price of a wireless megabyte less for the end-user. The paper notes that McAdam said that the cost of a megabyte of data over its LTE network would be half to one third of the cost of carrying the same data over the company's current 3G CDMA network.
The twist being that the average download speeds of 5 to 12 Mbit/s that Verizon is promising for its LTE network are around five times faster than averages and peaks over its 3G network, meaning that a user could potentially use a lot more data over the new network. So, it is possible that bill shock may not become entirely a thing of the past with LTE.
— Dan Jones, Site Editor, Light Reading Mobile