Verizon Wireless Preps for Tiered Pricing, Will Differ from ATandT

 
 
By Nicholas Kolakowski  |  Posted 2010-09-23
 
 
 

Verizon Wireless anticipates introducing a tiered pricing plan for data within four to six months, according to reports. That plan, however, will likely differ from the one currently offered by AT&T.

"We didn't need to be first on tiered pricing," Verizon CEO Ivan Seidenberg told an audience during an investor conference Sept. 23, according to The Wall Street Journal. "We're not sure we agree yet with how [AT&T] valued the data."

Seidenberg also indicated that Verizon covets the chance to carry the iPhone, "but we have to earn it." In the United States, Apple's bestselling smartphone is offered exclusively through AT&T, at least for the time being.

Seidenberg's words are unsurprising, considering that other Verizon executives have been hinting at a tiered-pricing switch for the past couple months. In a June interview with Businessweek, Verizon Chief Financial Officer John Killian said the company was considering tiered plans, given the "explosions in data traffic" linked to the ever-expanding number of mobile devices on the market.

"We will probably need to change the design of our pricing where it will not be a totally unlimited, flat rate," Killian said in that interview. "We control the decision."

Verizon plans to launch its own 4G LTE service in 30 U.S. cities by the end of 2010, with the service in the rest of the nation supposedly to follow by 2013. The carrier has remained tight-lipped about which cities will be chosen for the initial rollout, but the activated network will supposedly accommodate download speeds of 5M bps to 12M bps, with upload speeds of 2M bps to 5M bps. Those numbers are comparable to those posted by Sprint for its WiMax 4G network.

The assumption, of course, is that the increased nationwide prevalence of 4G will translate into more mobile devices, including tablets and smartphones, built specifically to take advantage of those higher speeds. While that might radically increase the customer base for the various carriers, it could also lead to intense pressures as their networks attempt to accommodate demand. Faced with that prospect, it seems inevitable that carriers would consider ending their all-you-can-eat plans, even if it means aggravating customers in the short term.

Indeed, Seidenberg in his comments hinted that the growth of the 4G network would be mirrored by a similar rise in mobile devices. Verizon's tiered pricing would presumably follow on the heels of that.

For his part, Sprint CEO Dan Hesse told his own conference audience that Sprint was examining tiered pricing: "We're not ruling out tiered pricing ... Tiered pricing is something we look at." However, Sprint has also focused on unlimited plans as a strategy for regaining market share.

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