Verizon’s CFO, Fran Shammo, spoke to a Goldman Sachs investor conference yesterday about a range of issues for the U.S. carrier. The most interesting portion relates to his views on the new Share Everything data plans that the company introduced recently and the death of unlimited data. He actually said:
“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, 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. So that whole unlimited thing I think is going by the wayside and they see the benefit of going to the shared.”
We’re sick of this argument that consumers think they use loads of data, but actually hardly use any. If that’s really true then why are carriers like Verizon switching to metered data plans? The reason most people come in below their data allowance each month is fear of overage charges. We discussed this issue yesterday when we asked when are carriers going to offer a data only plan?
Obviously T-Mobile and Sprint would disagree with Shammo’s comments since both carriers are offering truly unlimited data plans. Shammo also expressed surprise that a lot of customers left unlimited plans to sign up to the new shared data. Could that have anything to do with the fact that they’ll need to pay full price if they want to keep their unlimited data and pick up a new phone? Or is it because they are seeing the benefits of paying more monthly fees to Verizon?
What unlimited actually means to most of us is peace of mind – freedom from the worry of extortionate overage charges.
We’ll find out what the general public thinks in the next few months. Will Verizon customers make the switch to T-Mobile or Sprint for unlimited data? Post a comment and let us know what you think.
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If most people are naturally not using more than 2gb a month, than why is Verizon working so hard to convince us that we don’t need an unlimited plan? Why not give everybody unlimited data and just silently benefit from the fact that no one is actually using it? If we didn’t want unlimited data, then we wouldn’t have it at home. Who likes counting megabytes?
The other part of the argument is that the “average customer” doesn’t use much data. That is because the average customer doesn’t understand what all the new phones are capable of. I didn’t use much data either when i had my old Eris, but now that i have the S3 I am using more than 10GB a month easily.
My brother had a similar situation with his Original Droid, but since he stepped up to the Razr M he has used more than 1.5GB in less than a week. He is pretty pissed at Verizon for convincing him to take the 2GB/month plan. Beyond that the store rep didn’t even understand how to convert MB to GB stating that 10,000 MB are in a GB.
Thats no surprise…. Verizon is taking business advice from an elite criminal organization….
Exactly. Unlimited doesn’t really mean anything to Verizon, and by convincing the consumer of this concept i.e. “You’re only using 1.5GB/month, so a 2GB Share Everything plan is sufficient,” you switch to take advantage of the upgrade handset prices, maybe on your new iPhone 5 today that you were convinced to buy after all of those great (data-consuming) features were touted. Now you’re sporting a shiny new iPhone, getting directions, watching Netflix, 3G FaceTiming, and paying a $200/month bill, but you saved $500 when you bought it, so unlimited doesn’t mean anything. Hope you have WiFi. They’re right: good sales routine.
The reason Verizon doesn’t care about unlimited is because while sprint can only make up to $100 per month on the unlimited everything plan. Verizon can make up to $190 a month with 20GB of data and still reap the benefits of overage charges.
The only reason people are leaving Sprint is because currently the LTE coverage is extremely lacking. I mean we aren’t even expected to receive LTE over here in Portland till mid 2013. However, Verizon and ATT both have huge networks already set up for LTE all over the US.
The case with T-Mobile is also quite simple. While they will not charge you for going over 2GB of data. They will however cut up to 85% of your network speed once you hit 2GB. So T-Mobile is certainly NOT unlimited by any means. I think the general public thinks they would rather pay for a Verizon 4GB plan then deal with painfully slow speed past 2GB. It should also be noted that T-Mobiles coverage, while better then sprint in this area, is still lacking in comparison to both Verizon and ATT.
Great, if unlimited doesn’t mean anything, I’ll take the 10GB plan for the same price of my current unlimited plan right now, 30/month. Thanks Fran!