July 25, 2014
Back in 2011, Verizon began throttling its heaviest 3G data users in a bid to move them to its higher capacity LTE network, but now -- three years later -- it's applying that same policy to 4G unlimited users. (See Verizon Embraces 4G Traffic, Throttles 3G.)
Verizon Wireless has so far been the most effective US wireless operator at migrating its customers away from unlimited data plans. Consumer Intelligence Research Partners (CIRP) reported this week that, of the four largest US operators, Verizon has the fewest still on unlimited -- 22% compared with 44% on AT&T Inc. (NYSE: T), and 78% on Sprint Corp. (NYSE: S) and T-Mobile US Inc. , which both still market unlimited data. (See Verizon Continues 4G LTE Capacity Spend in Q2 .)
Now Verizon wants to drive those numbers even lower by applying its "Network Optimization" policy to LTE as well. Droid Life first discovered that it will begin slowing down network connections for those heavy unlimited data customers that "have fulfilled their minimum contract term" on LTE and are on a heavily-trafficked cell site. The policy kicks in on October 1, and Verizon says that throttling could last as long as the current billing cycle or even into the next.
Wondering if you could be one of the affected customers? Verizon says it should only affect its top 5% of data users, but it will apply to those who meet the following criteria:
have an unlimited data plan;
are in the top 5% of data users, meaning they use 4.7 Gbytes of data per month or more;
have fulfilled their minimum contract term, and;
are on a congested cell site.
These customers can, of course, use WiFi more often and better monitor and manage their network usage with Verizon's data tools, but the carrier is hoping they'll choose the option to move to one of its More Everything shared plans and away from unlimited. (See Verizon Manages Its Own Data Destiny.)
While its 3G throttling policy was aimed at migrating customers to LTE -- it said at the time that it welcomed the traffic on its 4G network -- applying it to LTE is all about economics: Shifting the remaining 22% of its customers away from unlimited deals will bring in more revenues for the operator, even if the policy only affects a small subset of customers.
CIRP says that because of Verizon's success in squashing unlimited plans, 51% of its customers pay at least $100 per month, compared with only 47% at Sprint, 46% at AT&T, and 33% at T-Mobile. Usage-based data plans and shared buckets are clearly the most attractive option for Verizon, and it's hoping to increase their adoption by making unlimited data increasingly less attractive to its customers.
— Sarah Reedy, Senior Editor, Light Reading
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