As customers and analysts pore over Verizon Wireless's new rate plans, which take effect June 28, the company is emphasizing that current customers will not have to give up a plan that already works for them.
The current plans allowing allocation of voice minutes, shared between family members, will sunset this month in favor of fixed plans for all lines -- $40 per smartphone, $30 per feature phone, with unlimited calls and texting. The sharing aspect then switches to data, with users able to divvy up one gigabyte for $50, all the way up to $100 for 10 GB.
Doing the Math
An individual user still paying $30 for a grandfathered unlimited plan (which Verizon began phasing out last year) or $30 for 2 GB wouldn't want to switch unless he or she is a low data user and the $40 flat fee for unlimited talk is less than his or her current plan, for example $59.99 for 900 minutes or $69.99 for unlimited.
In the latter case, a $99.99 bill goes down to $89.99 with the lowest data plan added on for 1 GB. (The savings would be lost with any overage, at $15 per gigabyte, however.)
But a family with four smartphones now paying $120 for four data plans with 2 gigs each could see some savings if they collectively use less than 8 GB.
For example, they could pay $80 for 6 GB. Even with two overages, for $30, the data cost would be less than $120.
Verizon is stressing that no one is required to give up old plans, (at least not yet).
"We're not forcing anyone to move to the new plans," the company's top marketing executive, Steve Mesnick, told Computerworld after several analysts publicly criticized the plan as being too much of a sweeping change in a fluid market.
Our e-mails and calls to Verizon were not immediately returned in time for publication.
ABI Research Senior Analyst Mike Morgan told us that, when the dust settles, it's unlikely the nation's top carrier will face a substantial customer revolt over the changes, the way movie rental giant Netflix lost customers when it drastically reshaped its rate plans.
"On paper, it still seems like a good idea to me, although they are obviously getting some consumer blowback," Morgan said. "People seem to fear they are going to be pushed off their current situation and forced into this."
Morgan acknowledged, however, that the current plans for voice and data could ultimately be phased out when current customers switch or add devices and the old rates are no longer available.
"They fear an optional change today won't be optional in the future," he said.
Check that Bill
But part of the fear is that people believe they need a lot more data than they do, he said.
"The average customer probably isn't savvy enough to take a look at the current data usage on their bill," he said. "Some could actually save money. When Verizon said most people do not use their full allowance, they aren't lying."
An average user checking Facebook or e-mail a few times a day will probably clock in at around 500 megabytes per month, he said, while those using their phones for constant music streaming via apps like Pandora or video streaming from Netflix could easily use their allotment in days.
"They are giving people tools to manage it," said Morgan, referring to text and e-mail reminders as well as a customized display on Verizon's Web site. "But someone who starts downloading HD video will get the 50 percent warning and the 75 percent warning very close together."