Android News

Verizon WILL introduce tiered data. Here’s why it does and does not make sense.

July 21, 2010 | by Andrew Kameka

Carriers, Verizon


Verizon has been hinting for months that it would switch to tiered data plans, most likely to come when the carrier introduced LTE next year. But rumors are circulating that they could introduce data plans as early as next month.

Aside from the most obvious sign that tiered data is coming – the My Verizon app has been updated to display data consumption – Verizon could eliminate unlimited plans because chief rival AT&T has already done it. The two carriers have a soap opera sibling relationship. It’s hard to tell who’s Stuart and who’s Adam (good twin, bad twin from All My Children), but one brother’s moves affects the other’s.

Here are a few reasons tiered data plans make sense; depending on which brother you agree with.

MAKES SENSE: Gives regular customers options

The Droid line has given customers a healthy choice of options to AT&T’s iPhone and handicapped Android phones. So why not give those customers more choice in what type of data plans they buy? If Stuart uses only 1 GB of data per month, why should he pay the same as Adam, who uses 6GB? Verizon already employs tiered calling plans and they aren’t very affordable to some, but being able to get a cool phone that didn’t throw on a mandatory $30 charge might make that Droid X more attainable.

MAKES NO SENSE: Gives power users less options

The Droid line also appeals to a sector of smartphone buyers known as “Power Users.” These are the folks who are on their phone constantly, and not just for calling. They are tweeting, downloading podcasts, playing online games, listening to Pandora, and streaming YouTube over 3G. These are the types of folks who can eat through AT&T’s 2GB data cap in two weeks. Eliminating unlimited plans will force these users to pay hefty bills or drastically curtail their habits.

MAKES SENSE: You’re getting a premium network

AT&T has a reputation of having a poor network that’s constantly dropping calls in select cities. Verizon has a much better reputation, and that’s why people are willing to pay more for its services. If you want a top-rate network, you have to pay top dollar. Would you prefer paying AT&T just about the same amount of money for a lesser experience?

MAKES NO SENSE: Even premium has limits

AT&T has downloads speeds that are consistently faster than Verizon in several cities, and the dropped call phenomenon obviously doesn’t affect the entire country. But once you start removing some of the trump cards that Verizon has over AT&T, like unlimited data, your network becomes less appealing. And if the experience on your network prices out many users, I’m sure they’ll be happy to take their business to T-Mobile’s expanding HSPA+ network or Sprint’s cheaper unlimited plans. (If coverage allows.)

MAKES NO SENSE: Everyone is a power user

It’s been said time and time again: most customers don’t go over 2GB’s so what’s the big deal? I only use my phone to call, check the web, and download a few apps, so problem solved, right?

Wrong. There’s no “It makes sense” viewpoint on this issue because everyone will be a power user soon. AT&T uses today’s standards to determine data patterns, but tomorrow’s data patterns matter most.

If people can video chat, play multiplayer 3D games, stream Netflix movies, watch or upload HD video to YouTube, use Skype over 3G, upload and download images from Facebook, and use any one of thousands of apps that display ads or send user data, how can anyone honestly say that people will always stay within those 2GB caps?

This is the primary reason that tiered data is a bad move for Verizon. It’s one thing to argue that all carriers place soft caps on users, but if carriers continue to tout their networks speeds and the thousands of cool things we can do on their phones, we will reach a point where a large portion of subscribers will burst through those caps regularly. That doesn’t make sense.