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 10:20AM
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Easy way to share in Verizon's future price increases and profits and help offset your bill.

 

Buy Verizon stock thru a discount broker.  Put in a 401K and pay no taxes and get tax deduction on your income taxes. WIN WIN WIN

 It pays a 4.7% dividend ( higher than any bank, T-bill )and  probably the stock will go up  10-30% in the next 2-3 years.  Eases the pain. 

Do what the 1% does.

 

 

 

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 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 9:55AM
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It's about time. I dropped Verizon a short time back because they couldn't give me one plan with multiple devices.  It's not that I went with another company....I just decided I didn't really need all those devices.  Now that there is a plan for multiple devices, I might think about hooking up again.  But then again, I've been getting by without all those devices, so maybe I'll just keep saving my money.
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