Verizon shakes up wireless pricing

The 'phone company' era ends as the carrier ditches its voice plans in favor of a new sharing model that encourages subscribers to hook up tablets, laptops and more.

By InvestorPlace Jun 12, 2012 9:38AM

The age of "phone companies" is officially over.


The wireless arm of Verizon (VZ) has long understood the mobile revolution. And as a result, it is dropping nearly all of its voice plans and shifting to data-focused subscriptions that allow multiple devices, including smartphones, laptops and tablets.


It's a wise move for the nation's largest cellphone company -- if you can even call Verizon that anymore -- and a change that competitor AT&T (T) likely will replicate very soon.


Here are the details on the Verizon changes, which take effect June 28:


Pricing schemes focus on data usage and allow consumers to share bandwidth across up to 10 gadgets. Dubbed Share Everything, the plans will include unlimited phone calls and texting and start at $90 per month for just one smartphone and 1 gigabyte of data, with additional charges for devices and usage as consumers do more with their electronics.


Verizon is billing the Share Everything prices as a boon to consumers who don’t use a lot of data, as they are cheaper than current plans with unlimited calling and texting.


However, those of you who still use an old phone primarily for voice will see some sticker shock if you opt into this plan.


A very basic $40-per-month plan will remain in place for users of "dumb" phones who don’t consume any data. But other than that, it’s the $90 data plan and up.


Obviously, the new pricing is a huge plus to folks with multiple devices, since the fees for getting separate data plans for every tablet or laptop can really add up.


AT&T has already said it's looking at introducing shared-data plans soon. Just a few days ago, it called data-only plans inevitable, so while Verizon seems to have beat AT&T to the punch, you can expect its top rival to follow suit.


This is a huge change for the major telecom companies, and it closely follows a move in the past year to end unlimited data plans as superusers of mobile devices have clogged up networks.


So what does this mean for consumers? The good news is folks with a lot of personal electronics are going to get a break -- both in the logistics of billing, with a shared account for all their gadgets, and on pricing. For instance, Verizon will stop charging extra to allow you to use your smartphone as a mobile Wi-Fi hotspot.


And just paying for the data instead of footing a fee for access to Verizon networks might finally encourage folks to get their Kindle Fire or iPad hooked up anywhere instead of relying only on Wi-Fi. That ultimately could place much more stress on Verizon's network, so capacity is key if demand does rise sharply.


But more importantly, this move is a signal that the old era of phones as we know it is officially over. These days, mobile devices can do so much more than just allow you to talk to someone, so Verizon is smart to evolve with the electronics industry and focus on data first.


It's amazing to think that 15 years ago less than 5% of people in the world had a cell phone. Now mobile conversations have become all but an afterthought.


More from InvestorPlace.com


74Comments
Jun 12, 2012 9:57AM
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Sounds like a way to zing customers with more fees to me!  Anyone want to bet that the average cell bill goes up a bit?

Jun 12, 2012 10:07AM
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Everytime I see a special plan, I remember signing on and then recieving a bill for alot more than I agreed to. When I called to discuss the bill, they always had some kind of explanation.  It is never as it seems.

Jun 12, 2012 1:17PM
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smoke and mirrors, it's just another way to INCREASE what consumers are paying! I'm sure you are right about others following suit, but you are dead wrong about this being a good thing for cunsumers!!
Jun 12, 2012 12:48PM
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If Verizon trys to jack up rates on my "dumb" phones I will drop them like a hot potato!  Texting needs to be banned.  Part of the downfall of our society IMO.
Jun 12, 2012 2:18PM
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90 dollar phone service is a rip off
Jun 12, 2012 2:46PM
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I pay Verizon $30 per month for 2 gigs now. How is $90 for 1 gig a "boon to consumers"?


Jun 12, 2012 11:31AM
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My current Verizon smart phone plan is about $80 a month for one device-450 minute voice, 1000 text & 4GB data, which suits my needs just fine.  Now the new plan starts at $90 with only 1GB of data! Granted, it has unlimited voice and text, but why should I pay for what I don't need? It's pretty easy to consume data and I'm sure Verizon will charge an arm & a leg for additional data.  I bet you could easily pay $120 a month for a single device on this new improved pricing plan.  Behind the so called positives, it's just another way to rip off the consumer!!!!   
Jun 12, 2012 10:56AM
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People really have no idea how much a year they would save if they ditched their data phones. Having a tablet with WiFi, and using it when there is service around is all you really need.  $360, $480?? per year.  Now drop your extended basic cable plan to just basic for another $400 savings a year, and then tell your cable company you cannot afford the $50 a month for DSL anymore and they will find a less expensive plan for you and save you another $240 a year. We are totaling a cool $1000 a year savings here, and I am talking an easy 1000.

Most people who don't need to be, are too wired. All they do is stare at their phones all day. Live life a little, talk to someone. Get up from that TV at night and do something productive with family. We simply are being sold on things we can easily live without.

Jun 12, 2012 12:09PM
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Yea, once verizon decides to drop basic subscriber phone/dsl  service @ $45.00 a month (actually a bit higher usually.) I'll just not have a home phone or internet.

can't buy what you can't afford.

Jun 12, 2012 2:20PM
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im dropping my service too expensive for what you get

 

Jun 12, 2012 3:36PM
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Verizon only makes changes that benefits Verizon.  A minority of their customers will benefit.  The majority won't...

Jun 12, 2012 10:38AM
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still overpriced! The phones are made overseas where it cost little to make....I never mind someone making a living...hate supporting those making a 'killing.'

I remember the day to have a phone bill WITH long distance amounted to $60 a month!...that was a "shoot me! I just robbed my family"  moment. Now folks wouldn't blink twice at it. How can folks talk about having it rough financially and fork over $100 or more a month for telephone privileges & extras?

Jun 12, 2012 11:24AM
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Sounds like another gimick to force people to buy data plans and expose them to overage charges.  Good thing data overage is relatively cheap 10.00 per gig but don't go using that data service for youtube, streaming audio, or games... I've talked to people who had 500.00 to 2,000 in data overage and that's the cheap 10.00 a gig rate.  Times have changed, we download so much more than we use to, and website viewing isn't a few 100 KB any more. 

By  the way, was it just me, or did this article sound like a big VZ commercial? LOL! 

Jun 12, 2012 12:31PM
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Anytime Verizon has a price that ends with the phrase "and up" expect it to be more on the "and up" end of the scale. I've been with Verizon since before they were Verizon (GTE) and have threatened to go to another carrier many times. I will be watching this closely to see what all the carries will come up with and to see Verizon's final roll out and pricing.

Jun 12, 2012 1:34PM
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"Dubbed Share Everything, the plans will include unlimited phone calls and texting and start at $90 per month"

 

Cheaper for people who don't use that much data?

 

Smart Phones with unlimited text and voice just used to be 60-70 bucks for people who didn't want to use data. No they're saying it will be 90 bucks even if they use no internet data?

 

"That ultimately could place much more stress on Verizon's network, so capacity is key if demand does rise sharply."

 

Uh....so they are releasing a program that will encourage people *cough cough* force them to use the networks instead of free wi-fi while limiting them to 1GB of data. WTF. 1GB is nothing.

Jun 12, 2012 11:50AM
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Wireless technology is increasing. And for awhile, wireless providers have the edge on squeezing every dollar out of us possible. But the time will come in the very near future where this will not happen as new sources of wireless technologies are developed and wireless companies like cable TV companies find themselves less and less useful and necessary. Verizon and other like companies better get on board with more reasonable pricing, or they will be pushed aside.
Jun 12, 2012 10:41AM
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$90.00/mo. & Verizon THINKS that's a REASONABLE, AFFORDABLE charge?????

 

Sounds like new plan, same ol' RIP OFF Verizon to me... AT&T to follow suit... Hmmmm, somehow that don't surprise me either but then I always knew I had to have a GOOD REASON for NOT doing business with EITHER of them!

 

Personally I think EVERYBODY should just SELL OFF any shares of stock in both these companies... THEY DESERVE TO TANK BIG TIME!

Jun 12, 2012 12:35PM
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I couldnt care less at all with whats going on with these companies. If people are stupid enough to complain about it, yet pay for it, its their own fault feeding these companies. I wish they'd all go under and go away just like these cable and satellite tv companies would. My work company supplies us with a data smartphone with Sprint and i can do what i need to with it. Other than that, we don't need a phone with data or texting. We got rid of all those phones and save hundreds a month after our contracts were up. The family has gone back with the flip prepaid phones and we buy minutes when we need them. Amazing to make a phone call again instead of hundreds of stupid and useless texts and actually use a phone when something is actually important and or an emergency. Works out great!  
Jun 12, 2012 5:18PM
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Another rip off if you just want cell  phone service I dont give a sh*t about all the bull and wasted time people spend playing with their phone.  Just need it to talk when necessary.
Jun 12, 2012 11:25AM
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Best thing I ever did was eliminate the cell phone
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