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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.
Your point that we will ALL be power users soon is exactly correct. That's what the providers are frightened of. They should have not pushed forward such great hardware if they can't deliver the service. I am dropping EVIL RED as soon as this becomes official and going to sprint or t-mobile.
I doubt verizon will get rid of unlimited data.. they’re going to go to ims voip so there will be no voice plans anymore and ppl will need more data.. I’m just betting on a plan that will be like unlimited data for a hundred bucks or more
Unless I get grandfathered in and can keep my unlimited data… I’m gone. I use WAY too much data to be on any type of a tiered data plan. Power-user would be an understatement.
- AdamZ
I agree with Adam. I use my Droid continuously, and there is no way that I could make due with 2gb a month. That’s why I bought a smartphone! Hope to be grandfathered in, or may have to look at other options…and after 9+ years, not something that I really want to do.
Seriously, I don’t know why Verizon is doing that, right now their services ain’t cheap plus they want to tier the data plans, if that happens (unless I get grandfathered in and can keep my unlimited data) I’m going with Sprint or T-Mobile, I use WAY more than 2GB a month. Looks like i have to save up for the ETF
Screw this bullshit taking off unlimited data plan… I’m switching to a carrier that will keep there unlimited plan… whoever invented that is a dumbass you need data to use you apps on an Android phone or Blackberry or even an iphone… People are stupid… So the idiot who made this crap needs to kill theirself… Retards go spend the rest of your life with George Bush cuz you guys have the same thing in common
It is amazing that with the amount of free wifi in the USA that people actually complain. Turn on your wifi radio and just hop onto a wireless network – unlimited data and it's faster than a mobile network! I have a 1GB plan here in Austria on my HTC Magic and use it constantly, but if I need to stream video or anything like that, I just hop onto a WLAN either at home, university or wherever I happen to be… if Vienna has this much free wifi, it's hard for me to believe that your average American city doesn't.
Sorry to tell u but nothings free in America. Just doesnt work like that. Some peoples only means of the internet here IS their cell phone. I'm a data hog as well and I'm on T-Mobile for just that reason.
I'm on my phone all the time to but I'm looking forward to the tiered rates so I can save some money. 99% of the time I'm using my phone for data is when I'm on a wifi network not a 3G data connection. I think there is a lot of over reaction going on here. The same thing occurred when ATT made the same announcement and they are doing just fine. Just make a point to connect to more wifi hot spots and your going to be just fine
Unfortunately wi-fi in America isn’t as widespread as you think. Wi-fi networks are only truly widespread in the major cities, much like the spread of broadband service. I can’t get broadband service where I live, and the nearest wi-fi hotspot is at least ten miles away. This tiered data plan would really hurt me, since I do most of my internet stuff using my android phone. They should at least keep the unlimited data just to have an edge over AT&T.
I was recently SOLD on the unlimited data plan and purchased the DROID X for a LOT of money. Now figuring the unlimited data plan and its costs, if Verizon changes this to a tiered plan, I am not only going to cancel the service but I am also going to return the phone for a full refund for misleading me on the plan that I was purchasing. I see a lot of lawsuits coming out of this.
Same here, they took my credit card money already and I am still waiting to receive the Droid X as of today. This will be my first smartphone and also the first time I will use a data plan (yeah, I am a dinosaur but the google apps sold me out). If they change this plan, I will ask for a full refund also. I'll start reading the small print.
__For the ones that said that we're over reacting… I paid my money so I don't have to keep thinking of how much I use my 3G this month everytime I have to do something online, like uploading videos or pics, etc. And for what I read using Wifi drains your battery faster, but correct me if I'm wrong.
I hate it when articles like this are written to justify these vultures’ actions. It is all about nickel and diming us consumers to death. That is what it is all about. I don’t think these writers have any sense of reality, just filling the page up.
Everyone seems blind to the lies AT&T/Verizon/Sprint/all else are using to "justify" the new data rates and caps.
They are whining that a few people are using too much data and it is impacting their networks. LIE!
I'll pick on AT&T here, but they are all guilty of the same.
They have no problem streaming the data. They have a problem of too many people connecting at the same time, not enough slots to go around.. at times and only in some places. They do not say the time of day the networks are stretched to the limit, or where. I could guess at San Francisco International Airport things get rather crowded, especially during the day. If a person is in Dixon California there would never be a crunch for connection slots, so where does the GB/month issue ever occur?
The real truth is that they see a way to make more money. What a person uses per month is spread over a month. If they only use 100KB in the entire month, but use that data at the wrong time at the wrong place, that little straw can strain AT&T's back, but not the total of their data usage over the entire month.
AT&T gets most of their internet data from Service Provider Corporation. They supply AT&T with internet to their towers. AT&T pays for the data and high-usage customers are cutting into AT&T's profits because AT&T pays for terabytes/month. It's all about corporate profits, not a technical reason. If it was truly a matter of high demand, they could charge like the electric utilities do, a time-of-use billing scheme. People would be charged more during the peak periods of the day and less at night when so many businesses wouldn't be operating or people actually would be sleeping at night, not using their internet, thus, lower demand, lower cost.
Monthly caps keep AT&T's own data bills low and profits high. People afraid of going into an overage will not use all their paid-for data and AT&T makes even more from unsold (un-billed to them) data. A company that demands to make at least a 20 to one profit margin on data is going to be really ticked off at anyone that individually lowers that profit ratio and the is the sole reason for data caps and overage charges.
"Wrong. There’s no “It makes sense” viewpoint on this issue because everyone will be a power user soon." – Excellent Point Andrew, most everyone will be at least a half-ass power user when they figure out (or are shown) the power of a smartphone. I do not own a smartphone yet, but my Dad does. He never uses it for anything but checking e-mail, it is a total waste of money but his company is paying for it. Younger people do not do that shit. If I had his iPhone it would be like a third hand and I would have to check data usage because I am sure I would get to the limit.