Verizon's Share-Everything Plans Could Kill Last Unlimited Plans
NEW YORK (TheStreet) -- Verizon(VZ) were to introduce its much-talked-about Share Everything plans Thursday. Once these multi-device data share plans take effect, Verizon will scrap the older family plans as well as individual tiered plans for new Verizon customers. While existing Verizon subscribers with tiered data plans won't be forced to change plans when they upgrade, the ones with the unlimited data plans will have to switch to one of the tiered plans unless they buy an unsubsidized phone.
Unlimited plans have become highly unprofitable for Verizon and AT&T(T) , both of which stopped offering the plans last year as the demands on their networks increased due to growing smartphone usage. As 4G LTE becomes the standard and spectrum gets scarcer, Verizon will be looking to kill these plans completely and monetize every last byte of data transferred on its network. It will also look to drive the adoption of other data-only connected devices such as tablets, telematics and M2M devices, as we expect most of the future growth to come from these devices.
See our complete analysis for Verizon here.
Move might decrease capital expenses
Verizon and AT&T have moved to throttle the highest 3G data users in recent times, claiming the move affects only the top 5% of their subscriber base. This small fraction represents the grandfathered unlimited data subscribers and will be the most willing to jump to LTE for the higher speeds the technology affords. Using the 4G technology as well as its market-leading LTE coverage as bait, Verizon will be looking to gradually eliminate this problem child altogether. It remains to be seen how many of these users will be willing to forgo their unlimited plans for an unsubsidized phone, but even if a majority do not, Verizon doesn't have to worry about the huge upfront subsidies anymore and can use the extra cash to pay for network upgrades.