Verizon Wireless said today that users grandfathered into unlimited data plans will soon have to switch to tiered pricing if they upgrade their devices.
"As you come through an upgrade cycle and you upgrade in the future, you will have to go onto the data-share plan and mov[e] away from, if you will, the unlimited world," Verizon Communications CFO Fran Shammo said during an appearance at a J.P. Morgan technology conference.
Over the summer, Verizon plans to introduce data share plans, which will allow for multiple devices to be connected to the same account - whether that be families or small businesses. Pricing details have not been released, but when that happens, those upgrading to a newer gadget will have to bid adieu to unlimited data consumption.
"A lot of our [90 million] 3G base is unlimited," Shammo said. "As they start to migrate into 4G, they will have to come off unlimited and go onto the data share plan. And that's beneficial for us for many reasons."
The news was first reported by Fierce Wireless.
Verizon dropped unlimited smartphone data plans for new customers in July 2011 in favor of several tiered options. Existing unlimited data customers could keep their plans, but earlier that year, Verizon had already started throttling those who consumed an "extraordinary" amount of data. Other carriers, with the exception of Sprint, have also moved to a tiered pricing/throttling combination to offset the influx of data customers.
The idea behind the data share plans, meanwhile, is partly to encourage users to adopt more devices. "We've kind of constrained the marketplace now around connecting more devices because everyone thinks, 'Well, if I connect that device, I now have to buy an additional data plan,'" Shammo said. "If I can add as many devices as I want and share that data plan, that's ... much more efficient from a family share perspective [and] from a small business perspective."
"It's a win for the consumer, but it's also a win for us that we're not going to take a huge revenue dilution here when we launch this plan," Shammo continued.
Given that 4G LTE devices tend to consume data at a more rapid clip than 3G, "we are fairly confident that we will see people start to uptake in the tiers, which is really where we'll get the revenue accretion in the future," Shammo said.
In April, Verizon Wireless announced that it would start charging a $30 upgrade fee for those who want to trade in their old phone for a newer model. Shammo said today that Verizon is "not seeing any impact from a customer base from that fee, so that was the right thing to do."
When asked about the FCC's review of Verizon's effort to purchase $3.6 billion worth of spectrum from several cable firms, meanwhile, Shammo said Verizon is "still extremely confident that the deal will get approved."
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