Verizon Tiered Pricing Plan Unlikely to Affect Users: Consumer Reports

A Consumer Reports analysis says most Verizon customers would not be affected by a tiered pricing plan.

Verizon this week replaced its $30-a-month unlimited plan with three new plans with varying data limits. The new pricing structure offers customers monthly plans of $30 for 2GB of data, $50 for 5GB of data and $80 for 10GB of data. A $10 plan for 75MB of data is available to customers with feature phones with limited Internet capabilities. A study by Consumer Reports noted the least expensive of those is also $30, and it offers 2GB of data per month. "That's far more data than the vast majority of phone users ever need-even Verizon smartphone subscribers, who reportedly have relatively large appetites for data," the report noted.

The company's past reporting, as well as other more recent reports, indicate that data usage, even by Verizon smartphone users, averages no more than about 500MB per month. Many customers, of course, use far less than that-including owners of some regular phones (detailed in Consumer Report's "Ratings" section, which is only available to subscribers) that require a data plan, even though they can't use the data-intensive apps that distinguish smartphones.

Unlike other major carriers, Verizon has not introduced a lower-priced tiered plan for the many smartphone owners who send and receive only a small amount of data every month. For example, minimal data users on AT&T can get a 200MB-a-month plan that costs $15 (its 2GB plan costs $25 a month). T-Mobile's plans are even cheaper, at $10 (220 200MB) and $20 (2GB) a month. Minimal data users on Verizon will, then, continue to pay the same $30 they've been paying for the unlimited plan. The small percentage of data hogs among the carrier's customers will pay more: $50 a month for 5GB or $80 for 10GB.

"The amount of data used by smartphone owners may, of course, increase in the future. That's especially true if they're on networks, including Verizon's, that are about to be upgraded (or expanded) to significantly faster 4G technology that may encourage greater data use by considerably increasing download and upload speeds," the report noted. "So far, Verizon isn't charging more to service the relatively few phones that run on its LTE 4G network. But that could change: Sprint, for example, charges a $10 premium on plans for its 4G phones."

The decision sees Verizon following rival carriers T-Mobile and AT&T in switching from an all-you-can-eat service to a tiered approach. Changes to the pricing terms of AT&T's high-speed Internet broadband service went into effect May 2. The changes, which include additional language to several portions of the customer contract, include a data cap of 150GB per month for DSL customers and 250GB for U-Verse subscribers.

While T-Mobile may eventually become the property of competitor AT&T, as the two companies plan a controversial merger, T-Mobile announced in April aimed to stay competitive with AT&T with its $80 Even More unlimited calling, texting and data plan on its 4G network. The plan is contingent on a two-year contract and features "no overage charges," according to T-Mobile. However, customers who exceed 2GB of usage per billing period, the company explained in the statement, "will still have access to unlimited data at reduced speeds until their new billing cycle."