Verizon's Share-Everything Plans Could Kill Last Unlimited Plans
Since the move does not affect a vast majority of its unlimited-plan base that uses less data than the corresponding similar-priced tiered data plan, it is not a high-risk strategy for Verizon. On the other hand, if Verizon had chosen to continue the unlimited plans for LTE upgrades, the small proportion of the unlimited-data users would have taken advantage of the higher speeds to use an even higher disproportionate amount of data. This could have forced Verizon to spend even more aggressively on its 4G capacity improvements than it had to on 3G. Verizon has seen its capital expenses mount over the past couple of years as it has spent on improving 3G capacity as well as rapidly rolling out LTE. It will now be looking to control its capital spending with LTE available in many U.S. markets.
While increasing ARPU levels
This bet on LTE might work after all; Verizon has already milked data demand enough with its 3G network. Now that the demand for data services is exploding but the supply of wireless spectrum is limited, Verizon will be looking to wrestle back control of the data plan pricing.
Offering shared data plans gives the carrier more control over how much data it can afford to offer for a particular price without straining its network. The shared data bucket will also be beneficial for many users as they will be able to use multiple devices in the same data bucket, potentially decreasing the per-device costs for a family. It also allows for a more efficient allocation of resources versus earlier, when a few high-data users used to clog the network to the detriment of the rest.
Further, as the demand for other connected devices rises, shared data plans will make it easier for users to manage all their device plans from a single account and further spur demand. Verizon's recent acquisition of Hughes Telematics also shows the company is getting serious about targeting this high-margin space where AT&T has taken an early lead.