Verizon to Ditch Most Phone Plans for Multi-Device Deals

verizon phone plansBy PETER SVENSSON

Verizon Wireless, the nation's largest cellphone company, is dropping nearly all of its phone plans in favor of pricing schemes that encourage consumers to connect their non-phone devices, like tablets and PCs, to Verizon's (VZ) network.

The new plans will become available on June 28, and reflect Verizon's desire to keep growing now that nearly every American already has a phone. The plans let families and other subscribers share a monthly data allowance over up to 10 devices.

It's the biggest revamp in wireless pricing in years, and one that's likely to be copied by other carriers. AT&T (T) has already said that it's looking at introducing shared-data plans soon.

Change, across the industry, was inevitable. In the first quarter of this year, phone companies, for the first time, reported a drop in the number of phones on contract-based plans, which are the most lucrative. To keep service revenues rising, the phone companies are betting on increased data usage, and that means getting more data-hungry devices on their networks.

Verizon's new "Share Everything" plans, announced Tuesday, include unlimited phone calls and texting, and will start at $90 per month for one smartphone and 1 gigabyte of data. If used only with a smartphone, "Share Everything" prices are lower than for current plans with unlimited calling and texting, but higher than plans with limited calling and texting.

The plans will push many subscribers toward spending more, by including unlimited calling and texting by default. Unlimited calling plans provide peace of mind, but not many people need them, and the average number of minutes used is declining.

From the carrier's perspective, providing unlimited access is an efficient use of its network, because calling and texting take up very little capacity. Data usage, on the other hand, consumes a lot of network resources.

The savings will come to subscribers who add more devices like tablets to their plans. In such cases, the new pricing system will be cheaper compared with separate data plans for each device. Today, few consumers put tablets on data plans, probably because they dread paying an extra $30 or so per month, on top of their phone bills.

Under "Share Everything," adding a tablet to a plan will cost $10 per month. Adding a USB data stick for a laptop will cost $20.

Verizon's limited-calling and texting plans will disappear, except for one $40-per-month plan intended for "dumb" phones. Verizon is keeping its limited-data plans for single non-phone devices, like the $30 tablet plan.

Current Verizon customers will be able to switch to the new plans or keep their old ones, with one exception. Those who have unlimited-data plans for their smartphones won't be able to move those to new phones, unless they pay the full, unsubsidized price for those phones. (For example, an iPhone 4S that costs $200 with a two-year contract costs $650 unsubsidized, with no contract.)

Verizon stopped signing people up for unlimited-data plans last summer. The industry as a whole is moving away from the plans, since the data capacity of their networks is limited.

Under the new plans, subscribers can stop worrying about monitoring the number of calling minutes or text messages their families use in a month, but they'll have to keep a close eye on data consumption. Verizon will allow subscribers to adjust their data allowance from month to month, but if they go over their monthly allotment, that will cost $15 per gigabyte.

The data allowances start at $50 per month for 1 gigabyte. That's enough for prudent two-smartphone users who use WiFi a lot, but Verizon recommends getting 2 gigabytes for $60. After that, each additional 2 gigabytes cost an extra $10 per month.

Under "Share Everything," Verizon will stop charging extra for letting devices act as "mobile WiFi hotspots." That means subscribers who have a recent smartphone could use it to connect a tablet to the Internet, without paying the extra $10 per month for a tablet.

Verizon had telegraphed the move toward shared plans, but had not revealed the details or pricing.

Verizon Wireless has 93 million subscribers on its plans. It's a joint venture of New York-based phone company Verizon Communications and Vodafone Group (VOD), a British cellphone company with wide international interests.

Verizon shares rose 2 cents to $42.58 in morning trading. The shares are close to a four-year high of $42.95.


Increase your money and finance knowledge from home

Socially Responsible Investing

Invest in companies with a conscience.

View Course »

Investing in Startups

The lucrative and risky world of startups.

View Course »

Add a Comment

*0 / 3000 Character Maximum

69 Comments

Filter by:
JOETELCO

What I want to know is when Verizon is going to get off their ass and end this contract dispute that has been going on since last August, 2011?? They are making billions of dollars in profits but forgot to pay the workers that got them there! Greed.

June 14 2012 at 12:28 PM Report abuse rate up rate down Reply
rann948

We have just regular phones from Verizon. We blocked texting. My phone doesn't even have a camera ! OMG
It isn't the cost, it is the principle. We do NOT want to be slaves to our phones, and I suspect that people will soon find that their know-it-all/do-it-all phones are becoming a security nightmare.

So where will all this leave us?

June 14 2012 at 2:32 AM Report abuse rate up rate down Reply
jacobsgold

Good grief I need to learn how to spell. I know, if we just give those teachers more money then they can do their jobs. How silly of me.

June 14 2012 at 1:23 AM Report abuse rate up rate down Reply
jacobsgold

On the other hand my daughter-in-law has to tell the world when she had a bowl movement and where. Of course she has to have a large dog to protect the family, and house, along with a better alram system than Fort Knox. Makes sense.

Texting, isn't that just morse code for idiots. You text on a PHONE! How stupid is this society?

June 14 2012 at 1:22 AM Report abuse rate up rate down Reply
jacobsgold

Whats a smartphone? lol I have a cell phone that is somewhere in my truck for emergencies. We have Verizon's cheapest plan for 2 phones and nevered used all the minutes. Where lucky enough to not be addicted to a phone or thinking anyone cares what we are doing every minute of the day. Get a life.

June 14 2012 at 1:15 AM Report abuse rate up rate down Reply
captainwiggins48

Cell phones give me an instant weird headache. If I switch ears the pain moves too! Does anyone else have this happen?

June 14 2012 at 12:51 AM Report abuse rate up rate down Reply
baride

If you don't like verizon...Try sprint. They will really give you something to complain about....if they pick up the phone. Long live Verizon.

June 13 2012 at 11:24 PM Report abuse rate up rate down Reply
hemipwr54

Here is my biggest gripe with this; I pay for data service, the phones are loaded with bloatware from VZW, and the like, these apps need updating, that uses my bandwidth, I don't want those apps but can't uninstall them or disable them, take off the crap you put on my phone or allow me to. Not paying for junk I don't want that uses my precious bandwidth.

June 13 2012 at 8:41 PM Report abuse rate up rate down Reply
topdadnow

And what do you do if you don't have any of these other devices?

June 13 2012 at 8:07 PM Report abuse +2 rate up rate down Reply
wshel18074

Truly the worst customer service ever is from Verizon. They just don't care.

June 13 2012 at 4:52 PM Report abuse +1 rate up rate down Reply