On July 7, 2011, Verizon Wireless will follow both AT&T and T-Mobile to become the 3rd major US carrier to adopt tiered data plans. Delly Tamer, founder of LetsTalk.com, offers his perspective on this industry shift and questions what it means for consumers in the future:
Weve seen metered options before with voice plans. We all remember the bill shock anxiety we faced every month wondering about minute overages and excess charges on our bill. Now, in the relatively early days of high-speed 4G data offerings, were beginning to see it again.
Pricing by the gigabyte simply does not mean much to users. Consumers dont know a gigabyte from a mosquito bite. What they do know, is that they now need to start worrying about it. What if my son leaves Pandora streaming in the back seat of the car for 5 hours? What data services are running in the background of my device and how many megabytes do these services use? Am I connected to Wifi or not? Consumers dont want to be burdened by these thoughts and our concern is that they will avoid using data services to their fullest extent.
When Verizon introduced its 4G LTE service earlier this year with an unlimited data plan for $30 per month, it was a bold move that was great for consumers. It meant consumers could freely explore many new features of their high-end smartphones and tablets (updating Facebook, watching YouTube videos, surfing the web, etc.) without wondering how much data theyre using.
Verizons recent announcement to stop offering its unlimited data plan is the latest in a recent series of similar decisions by other national carriers.
We have to question why the carriers are choosing to create this bill shock anxiety all over again? Why now? At a time when data services are becoming more and more popular, why are carriers choosing to make these services less and less accessible?
AT&Ts planned acquisition of T-Mobile will reduce the number of national postpaid carriers, and quite possibly the level of competitiveness in the wireless industry. AT&T states that its acquisition of T-Mobile will speed its ability to offer 4G services nationwide. But at what cost to the consumer? How many of us will be able to afford it? Our obvious concern is that there is no longer a truly competitive wireless marketplace and that pricing actions like these are indicative of things to come. Will AT&T now match Verizons data pricing? Will Sprint add tiered data pricing?
In a more fragmented, competitive market, we predict that reasonably unlimited data services would be offered by the carriers at about $25 per month. If AT&Ts acquisition of T-Mobile goes through, however, when it comes to speculation about any future pricing wars, all bets are off.