I remember the halcyon days when Verizon customers could take comfort knowing that they easily could use Google Talk, iMessage, Googe Voice and any variety of tethering apps to game Verizon and get out of hefty bills. The less carrier service, the better, right?
Verizon reps say the basic concept with this new plan is to allow customers to share more data among multiple devices. The price varies, though.
There’s a fee to access data on each device. For smartphones — the plan does include unlimited voice minutes and texting — the access fee is $40 a month. You need a chart to navigate other device fees, though. See below.
Verizon defends these changes as a way to better server users. But in the end, by my estimate, users lose.
In the short run, this new plan should please investors in that it shows Verizon is paying attention to the marketplace. It could protect revenues in an increasingly data-driven marketplace.
Consider just these three examples.
Voice Minutes: In previous plans, you could pick a plan with the lowest minutes possible and use data-solutions such as Skype or Google Voice to make voice calls. On Android, apps like Groove IP allow users to make calls from a Google Voice number over their data connection while retaining the benefits of calling from a phone number, rather than a Skype-ish username. Under the terms of this new contract, you lose the benefit of such third party solutions and workarounds. Voice minutes are now unlimited.
Texting: Apple and Google have been fighting carriers for years with their iMessage and Google Talk, respectively. If you use an Apple iPhone and ever text another iPhone, Apple iOS’ iMessage relies on your data usage plan — not the messaging plan. Similarly, Google Talk lets users on both iOS and Android chat without using carrier messaging. Under the new plan, Verizon nixes those billing advantages because texting is now unlimited.
Hotspot: Android users have been using their phones as data hotspots for years without Verizon’s permission. By using apps on both rooted and unrooted phones, the hacking community is historically more than a decent match for Verizon, which wished to stop such activity.
Bottom line: Unlimited data with a tethering charge is out. Charging for data is in.
Considering the above, Verizon is admitting defeat so far as customer hacking and workarounds go. Its new plan offers no financial incentive to care any longer. Why compete where this is no lost revenue?
It risks customer loyalty, though. Verizon just billed away its incentive to innovate in texting and voice. It structured this new plan so that unlimited voice minutes and texting are two services now forced on its customers. It’s like a restaurant forcing customers to buy unlimited bread in order to order the club sandwich. This doesn’t make sense. Bread alone is great, sure. But if you want a sandwich and you already have bread, you see the problem.
The really upsetting part of this plan is Verizon forcing consumers to pay for outdated modes of communication.
Verizon is putting a voice and messaging tax on data usage. Want data usage? Pay Verizon the voice and messaging toll, these new plans say. Consumers who want carriers to act more like just dumb pipes for data are getting what they want out of the new Verizon structured plans.
Only problem is, Verizon charges a massive tax for smartphones to gain access to those pipes in the end. Just look at the rates for a data-only plan.
Here, instead of 1GB of data costing $50, a comparable cost for most smartphone services, 4GB now costs $30.
It is amazing to me Verizon is so bold as to throw this in the face of its customers. For tablets 1GB of data costs $7.50. For smartphones 1GB of data costs $50. That’s a price inflation of 667 percent.
So, beneath our noses, Verizon has smartphone customers paying a $40 voice and messaging tax — and 667 percent more for 1GB of data.
A prediction: Google and Apple can try to continue to innovate with developments like iMessage and Google Talk, but Verizon will continue to make sure that those innovations don’t affect its profits. And consumers are left holding the bag. They’re paying for voice and messaging they don’t need in order to access what we all want — data.
Hopefully AT&T will not follow this trend. But it probably will. If there’s a bright side, it’s that Sprint and T-Mobile are beginning to develop their own LTE networks and alternative carriers like MetroPCS are gaining visibility. With Verizon shunting its customers with these new plans, at least the disgruntled have options to jump ship when it’s time to renew.
Like I said on YATS, I’m screwed. Thnx VZW. :|
-RAP, II
Great analysis as usual from Seth. Verizon penny wise only on this one — bad news for buyers. gs
Given my wife and my’s current situation, this would honestly work out better… if we only thought of the now.
We’re paying around $170 after taxes for 1400 minutes, no texts (Google Voice), and unlimited data on two Androids. I used the My Data Manager app on our phones to discover we’re both using less than 2GB/mo because we’re in wifi-rich environs almost all the time,
One of their new plans would run about the same, maybe a little less, at 4GB/mo. And with Google Voice and us on Verizon, we really can’t send or receive picture messages, which used to be a big part of her messaging activity. (She has to explain each and every time that all you do is put in an email address instead of a phone number. She says it’s annoying as hell.) As well, we do talk on the phone with each other a lot, and her with her friends and family. (I’ve tried Groove IP, it sucked. Will probably try again.)
ALL OF THAT SAID: I’m not on contract with Verizon (got a Droid Incredible when it came out, still running strong with CM9). I’ve already been planning for a few months to wait until Google I/O, see what’s announced in the way of phones then, and one way or another buy an unlocked Nexus device and move to Straight Talk at $45/mo for unlimited everything.
BUT I’m not sure if I will yet… my wife has had horrible experiences with their service not working, and with a baby on the way she doesn’t want me incommunicado (we live in an area that’s about as rural as you can get and still get cable internet). Given that was a few years ago, I’m hoping it’s changed, but if not, it won’t be the end of the world.
As well, I’m quite cognizant that sure, right *now* we don’t use more than 2GB/mo, but circumstances can change. Unlimited is a very nice safety net.
TL;DR: In the long term (years+), new plans suck. Right now, they may be what just we want.
Maybe I’ll just get a tablet and use a junky pre-paid phone…
I think the tablet options are quite interesting. I also wonder if you could set up a LTE SIM in a tablet and then switch it over to a phone and use it as just a data phone? I could easily live with just a data phone – the question is if they have some sort of ID locking the device to the SIM.
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