Verizon exec says unlimited is 'just a word'
Verizon Wireless isn't sweating its decision to kill unlimited data, and apparently, neither are subscribers.
Speaking at an investor conference, Verizon CFO Fran Shammo said more people than expected are embracing the carrier's new Share Everything plans, and a lot of subscribers are giving up unlimited data to do so.
“So what customers are understanding, and through our good sales routine, is once you explain to a customer their usage on a monthly basis, unlimited is just a word,” Shammo said. “It doesn't really mean anything and that people don't really--I think a lot of consumers think they consume a lot more data than they really do.”
Shammo is right about that last part, at least for now. According to research firm Nielsen, the average U.S. mobile subscriber used 450 MB per month in the first quarter of 2012--well under the 2 GB limit on Verizon's main tiered data offering. For customers who still need lots of voice minutes and text messages, and not a lot of data, shared data plans may be cheaper than individual or family plans.
What Shammo doesn't mention, though, is how Verizon is also strong-arming its customers into abandoning unlimited data. The carrier no longer offers subsidized phones to customers who want to keep their unlimited plans, so upgrades will cost them hundreds of dollars more unless they switch to tiered data. Even if they keep their unlimited data plans, they may see slower speeds in congested areas once they've used more than 2 GB per month.
Still, even if most subscribers don't come near their monthly data limits, there's still a psychological benefit to unlimited plans: Having one means not having to worry about whether one more hour of Pandora or a handful of videos on YouTube is going to result in overage charges. As mobile data consumption grows, users will lose peace of mind. Verizon may actually be banking on that possibility, so even subscribers who save money on shared data plans may eventually move up to higher data plans.
As for Shammo's contention that the “whole unlimited thing I think is going by the wayside,” Sprint and T-Mobile would beg to differ. The former will continue to offer unlimited data as it brings its faster LTE network online, and the latter recently started offering unlimited data plans with no caps or speed limits.