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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

June 12, 2012 at 10:07 AM

Verizon unveils shared data plans, sea change begins?

Verizon Wireless today announced new shared data plans, a move that could lead to a shake-up in how people in the U.S. pay for wireless broadband on mobile devices.

As more consumers use multiple wireless devices including phones, tablets and even Web-enabled cars, the old billing models that require minimum data plans per device make less sense, at least from consumers’ perspective.

Wireless companies have been hinting that they’ll start offering shared data plans and now Verizon’s started the shift. The new pricing approach by the nation’s largest carrier provides a glimpse at what it’s going to cost over the next few years to have multiple, web-connected wireless devices.

People with a single device may end up paying more, but there are savings for those with multiple devices and fairly high data consumption.

Under the new “Share Everything” plans that are rolling out June 28, Verizon customers may add up to 10 devices to their account and pay for a monthly allotment of data that’s shared across the devices. Verizon charges a flat rate per device.

Consumers will pay $40 per month for smartphones, $30 per month for feature phones, $20 per month for laptops or portable modems, and $10 per month for tablets. Voice minutes and messages are unlimited.

Data’s not cheap, though. Prices start at $50 per month for 1 gigabyte of data. Two gigs are $60 per month and 4 gigs are $70 per month. Tablets, laptops and portable modems can be added to the plan without committing to long-term contracts.

Under this approach, the minimum price for a smartphone with a data plan is $90 per month. Using an iPhone and an iPad on Verizon would cost a minimum of $100 per month.

“Customers asked, and today Verizon Wireless delivered an industry first,” Tami Erwin, Verizon’s chief marketing officer, said in the release. “Share Everything Plans are the new standard for wireless service.”

Erwin said the new plans are simple, convenient and worry-free.

Verizon’s move commoditizes voice plans and may encourage new patterns of mobile device usage, enabled by the more flexible plans, Eddie Hold, NPD vice president, said in a post on the research firm’s blog.

Hold said the approach still faces challenges, such as the fact that tablets aren’t used that much on cell networks yet since they’re mostly used in the home with WiFi.

“However, the plans enable a change in consumer behavior that may be inevitable and if the plans did not change, the consumer behavior never would have,” he wrote.

Verizon said customers may keep their existing plans or move to the new “Share Everything” plans with no fee or contract extension.

Under Verizon’s current, individual wireless plans, a smartphone with unlimited minutes costs $70 per month for voice and $30 per month for 2 gigabytes of data or $50 per month for 5 gigs. Unlimited message service costs $20 per month.

Verizon will continue to offer usage-based data plans and will not require customers to switch to “Share Everything” plans. Customers who still have unlimited plans – which Verizon dropped earlier – can keep them, but if they upgrade to a new phone they’ll have to pay the full retail price for the new device.

A Verizon spokeswoman said that some customers who move to “Share Everything” plans will see monthly charges drop. Others will see charges increase “slightly” or remain flat “but many will see an increase in available minutes in their plans.”

She said “nearly all customers will receive more value” when they move to “Share Everything” plans.

AT&T declined to comment on if and when it may offer shared wireless data plans. T-Mobile USA last month said it’s not moving toward shared data plans and will stay with its “flexible pricing” approach.

Here’s a chart provided by Verizon showing the data price tiers:

vzw.jpg

Here’s a chart Verizon provided that compares standard nationwide plans versus “Share Everything” plans. It shows that pricing is a bit higher for people with just a smartphone, although the new approach offers unlimited minutes. Savings begin to appear when you have two or more advanced devices:

vzw2.jpg

Comments | Topics: 4G, AT&T, Broadband

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