Customer Experience Management (CEM)

Verizon EVP: New Data Plans Not Reactionary

Verizon's new data plans may seem like a competitive response to T-Mobile's own uncarrier tweaks, but a Verizon executive vice president says they were in the works for a long time and are part of a larger move towards simplification ahead of the next iPhone launch.

On Thursday, Verizon Wireless will launch its new Verizon Plan, which does away with smartphone subsidies and contracts, instead prompting customers to choose from a small, medium, large or extra-large data bucket and either bring their own device or pay it off in monthly installments. (See Verizon Ditches Wireless Service Contracts.)

Many in the industry, including T-Mobile US Inc. 's own CEO John Legere, said Verizon's new plan structure was a result of T-Mobile doing away with smartphone subsidies and contracts, but David Small, executive vice president of wireless operations at Verizon Wireless, said the plans have been in the works for a long time as part of a move to simplification. (See T-Mobile Gives More Data to Families.)

Speaking at the Oppenheimer conference Tuesday, Small said Verizon felt now was a good time to launch because of people doing back-to-school shopping. And, he said, in a month or so "there could be a significant device launch" that Verizon would want to have pricing ready for, referring, of course, to Apple Inc. (Nasdaq: AAPL)'s expected iPhone launch in September.

"So, look, this was not a reaction in any way, shape or form," Small said. "This is something we've had in the works for quite some time. We had it essentially at the ready. We also knew this dovetailed very well with what we wanted to do in terms of device payment, or installment plans, so the timing worked very well there as well."

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With the new plans, Verizon customers can change their bucket any and every month, but the carrier hopes more will opt for the higher-data family plans. Small said as they consume more, it becomes more cost effective for them and more financially attractive for Verizon. It will also offer higher plans than the $80 12GB monthly plan, but won't advertise them.

"It's really simplistic, and we can help categorize consumers and their usage patterns in a very simple way to help them guide what data allocation they might need," Small said, later adding that he expects existing customers to upgrade to the new plan and new customers to switch to Verizon for it.

Don't be surprised if Verizon stops telling its customers when they're close to their data caps though. Small said Verizon has a lot of tools in place to alert customers of their usage, but that it's not a great message to have when it wants to sell more data. Plus, he said, Verizon's research with Millennials on family plans suggested they didn't like the alerts. They felt like Verizon was telling on them to their parents about their data consumption.

"For that and many other reasons, this notion of adding more value and having consumers move up in the curve in terms of their consumption is good for the industry, and we certainly think it's good for us from an investment point," Small said.

Regardless of Verizon's motivations, contracts and subsidies of yore are officially a thing of the past. In addition to T-Mobile, Sprint Corp. (NYSE: S) recently launched its All-In pricing plans designed to simplify bills, while AT&T Inc. (NYSE: T) has been pushing its Next plan for awhile now. (See Sprint Goes 'All-In' on New Pricing Plan and AT&T Gets 81% of Subs Off Unlimited Data.)

The plans should, hypothetically, help consumers better understand where their money goes each month and potentially find a plan that best fits their actual usage. The plans could also mean more customers hold on to their devices longer as they realize how expensive they are without a subsidy. In addition, the lack of contracts means consumers are free to jump ship each month, however, that's not likely to happen given the incompatible spectrum bands wireless carriers still have in the US.

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editorial Operations Director, Light Reading

KBode 8/12/2015 | 2:45:12 PM
Re: The tell Yes. Verizon scoffed at ditching the subsidy model just a few years ago. I'm sure this moving has NOTHING To do with T-Mobile. :)
DHagar 8/11/2015 | 9:42:18 PM
Re: Newer phones might allow users to switch more easily mhhf1ve, I bet Verizon hopes not too many people will go that route.

I still think they are doing far too much explaining that they are NOT copying and ARE simplifying. 
mhhf1ve 8/11/2015 | 4:25:34 PM
newer phones might allow users to switch more easily... The next iPhone might allow users to switch carriers with software? And an unlocked iPhone 6 (from Apple) can already switch carriers at will.... So it looks like the barriers to switching might be lower very soon. I would love it if I could get an on-demand VZW plan (pay as you go?), but.. not at the current minimum bucket size of $30/1GB? 
Mitch Wagner 8/11/2015 | 4:13:35 PM
Data buckets The buckets are likely to confuse consumer. I'm a Verizon customer, I couldn't tell you how much data I use, and I work in the industry. I'll probably just go for the next tier up from whatever I used last month, assuming I can find that informaiton without having to tear up all the floorboards in the house. 
mendyk 8/11/2015 | 2:52:19 PM
Re: The tell And the fact that VZ is using a British-sounding voiceover for its latest T-Mobile counter campaign has nothing to do with insinuating that it's a much classier carrier than the upstart f-bomb slingers.
Sarah Thomas 8/11/2015 | 2:46:50 PM
Re: The tell Nah, in no way, shape or form is that true.
mendyk 8/11/2015 | 2:25:10 PM
The tell Sounds like Potty Mouth is getting under the skin of some VZ suits.
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