The ToyBox

Ricardo Bilton & Gloria Sin

Leaked memos confirm Verizon's tiered data ambitions

By Ricardo Bilton | June 24, 2011, 5:00am PDT

Summary: An internal Verizon email sent to retailers breaks down the company’s tiered data upcoming plans. So long, unlimited data.

In case you were not entirely convinced by previous reports on Verizon’s intent to give unlimited data plans the axe, look no further than this latest bit of proof.

The documents, obtained by AndroidCentral, confirm much of the previous speculation, which, all told, seems to be pretty bad news for consumers. Here are some of the important bits, many of which have been reported previously:

The pricing: $30 for 2GB, $50 for 5GB, $80 for 10GB. Overages will cost you $10 per GB.
Customers already signed up for Verizon’s $29.99 unlimited plan will be grand fathered in after the new changes are enforced. (But for how long?)
New Verizon customers that jump on board before July 7th will still have access to the unlimited plan. Anyone that signs up after will be out of luck.

With July 7th drawing near, this gives you two weeks to sign up with the current plans. Better get moving.

[AndroidCentral]

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Verizon Communications Inc., Data Ambition, Ricardo Bilton

Ricardo Bilton writes for ZDNet's The ToyBox. His work has appeared in The Japan Times, The New York Observer, and The International Business Times, among other publications.

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FIgures...

safesax2002 24th Jun

I have about a month and a half after that deadline before I can upgrade and finally get my smartphone. Grrrrr.

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RE: Leaked memos confirm Verizon's tiered data ambitions

sbf95070 24th Jun

@safesax2002

If you are close to your date and want to upgrade, talk to a store. They waived the cancellation fee for me when I upgraded to a Droid. They also have periodic deals to get you on a smart phone.

I'm not associated with Verizon other than as a customer. I'm just passing on my experience.

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RE: Leaked memos confirm Verizon's tiered data ambitions

FausterChild Updated - 24th Jun

@safesax2002

I don't have Verizon, but I don't see why you wouldn't be able to add an unlimited plan to your phone now. Most companies will allow you to make changes to your data plans if you go into a store or call customer support. And judging by the handout above, you should be able to apply high data plans to a regular phone.

Again, I don't have Verizon, but sbf95070 makes a good point, just give 'em a call. Might cost you $30 this month, but it'll be worth it in the long run.

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Switch to Cricket

ye 24th Jun

I've been using them since 2006. Unlimited everything. Love my Android based smart phone. For which I don't worry about data usage.

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RE: Leaked memos confirm Verizon's tiered data ambitions

firemanjerry 24th Jun

Just like any good "dealer" or "pusher" they give you a little to try for a while and get you good and hooked, then, oh boy, sorry bout dat, yo, but you's gotta pay. I'm sure there will be more to come.

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RE: Leaked memos confirm Verizon's tiered data ambitions

tom@... 24th Jun

@firemanjerry
Agreed; there will be a LOT more to come, including the likes of Netfliix, other wireless companies, e-mail, Google with their "chrome" everything, all their currently "free" servces, software applications such as java, browsers, etc. etc. etc.. The "time of enlightenment" is coming closer to the "time of reality" once everyone's sufficiently hooked.

There's a gazillion bucks out there to be sucked down. Enough wll pay for it that the ones that fall off won't even be noticed. Funny: Where the idea to make everything available from one source or app used to be the trend, now it's separatism again so it can be charged for. Those without a life and the means to support one better start thinkinig about alternatives right about now.

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RE: Leaked memos confirm Verizon's tiered data ambitions

sbf95070 Updated - 24th Jun

You may be correct with your speculation, but there is another option consistent with the data you present.

If you read the plan info carefully, it says "unlimited email and web browsing" on a smart phone. It doesn't say unlimited data.

I know as a customer, I have asked them for more options in terms of data plans for tethering and net books and I suspect so have others. You may be looking at plans for hotspots, tethering and data other than the basic browsing and email functions on a smart phone.

This would be more consistent with Verizon's advertising around unlimited data on their smart phones.

If July 7 is the magic date, we will know soon.

As of June 22, they gave me the same unlimited plan when I upgraded my wife to a Droid 2.

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Big wide bell curve

Robert Hahn 24th Jun

I don't think that anyone can say "this is bad news for consumers" (as opposed to, "this is bad news for me personally") without knowing what the usage distribution looks like. What percentage of Verizon's data customers use less than 75MB a month, are now paying for more than they use, and will view this as a good deal? If we don't know, we can't say this will "hurt consumers".

The problem with all 'unlimited' and 'bundled' offerings is that they are good deals for people whose usage is above average, and bad deals for people whose usage is less. Over time, the guy who offers "unlimited" collects a customer base consisting almost entirely of heavy users, which means that either his prices have to continually go up or he goes out of business.

My guess is that there is huge variation in the amount of data used from one customer to the next. Some people will watch a lot of movies, some will never use their smartphones for anything but email. There's just no way to fashion a pricing plan that is fair to people without taking that into account. The heavy users will hate that, because they've enjoyed having the occasional users subsidize their data plan. Too bad; that has to end.

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RE: Leaked memos confirm Verizon's tiered data ambitions

tom@... 24th Jun

@Robert Hahn
I don't know; there surely is such a bell curve as you indicate, but ... it's a HUGE one. Huge enough that even the outer edge on the low side might be enough to make a lot of money from. It's so easy to gather data on people these days just by using public data, that I suspect most companies are going to have a pretty good picture of what the possibilities are for them. Whether/how/and if they implement proper planning remains to be seen of course.

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RE: Leaked memos confirm Verizon's tiered data ambitions

FroggyJ4@... 24th Jun

@Robert Hahn
It's bad for consumers because there is no advantage to this new scheme only disadvantage. The 75MB option you discuss is only available to feature phone users. So if smartphone users use more than 2GB, they'll have to pay more than they're paying now. If they use less, well they still have to pay for 2GB. Verizon admitted that most people use less than 2GB. I wonder what that distribution looks like; I wonder if the majority of consumers use less than 1GB and will be forced to pay for an extra GB.

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RE: Leaked memos confirm Verizon's tiered data ambitions

snoop0x7b 24th Jun

@Robert Hahn I fall into the 500-800MB/month category. It probably won't hurt me... What I don't like is the huge overage charges and the fact that the pricing doesn't really correlate to cost.

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Bait & switch

ScorpioBlue 24th Jun

Customers already signed up for Verizon?s $29.99 unlimited plan will be grand fathered in after the new changes are enforced. (But for how long?)

No long at all.

Can you say "bait & switch"?

Can you say "captive audience"?

Can you say "suckers"?

Don't forget that these folks will see a sticker shock one month sometime here in the near future. And it will be a doozy.

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RE: Leaked memos confirm Verizon's tiered data ambitions

lehnerus2000 29th Jun

@ScorpioBlue
Expect EXACTLY the same to happen, once the "Cloud" companies have lured suckers (sorry, customers) into storing all of their data in the "Cloud".

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I Disagree

pantherfan690 24th Jun

@Robert Hahn, I disagree that any user is subsidizing another user. It can be determined by looking at the earnings statements that they are making incredible profits on their cell business. My company can only DREAM of margins like theirs. When they charge $10 per gb of data that costs them .08 cents, that is price gouging to me. The only reason they get away with it is some backroom deals where all the big cell companies agree to keep rates set at a certain point.

If they charged realistic rates, then i would agree with your statement that pay per gb is fair, but until they charge rates similar to what you can get in other countries (for example in the Philippines, a 3RD world country, i can get unlimited hspa+ data for $15 per month), then i think the cell companies need to be stopped from rolling out these heinous plan

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OK, but get your facts straight

Robert Hahn 24th Jun

I don't understand. Since this article was about Verizon, I looked up Verizon. Their profit margin is 3.32%. You think that's high? Their return on assets is 5%. Big whoop.

Climb down off the grassy knoll, eh?

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RE: Leaked memos confirm Verizon's tiered data ambitions

daengbo 24th Jun

@Robert Hahn
I looked up Verizon, too, and gross profits were ~60%. Since accountants and businesses do everything they can to reduced profits to avoid taxes, income drops to ~10%, and net income after minority interest was ~2.5%.

Gross profit for the telecom industry is right up there with the publishing and entertainment industries.

The gross profit is the much more important number. All the rest is accounting which aims to be as close to 0 without upsetting investors as is possible.

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Don't take the CPA exam any time soon

Robert Hahn 24th Jun

Horsefeathers. Gross profit leaves out capital goods employed in providing the product or service. Telecommunications is a hugely capital-intensive endeavor. Most of the cost is buried fiber, buried copper, microwave towers, and so on. None of that gets subtracted from revenue to produce the gross profit number. By your lights, everything beyond paying the electric bill is an accounting trick. OK, but then I get to think you're an idiot.

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RE: Leaked memos confirm Verizon's tiered data ambitions

WSguru 24th Jun

How sad- Americans pay the most for pervasive connectivity, world wide and have some of the poorest service capabilities and plans.

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RE: Leaked memos confirm Verizon's tiered data ambitions

WSguru 24th Jun

How sad Americans pay the most for pervasive device connectivity compared to the rest of the world, and we have some of the worst service capabilities and plans.... I won't even mention Verizon's crappy customer no service.....

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RE: Leaked memos confirm Verizon's tiered data ambitions

genewitch 24th Jun

comparing our networks to those of a third world isn't fair. The more users the more complex each node/tower has to be. The sheer amount of people means that they have more to maintain.

However, the margins *are* insane. Bandwidth really isn't that expensive, over all. 1 gig costs me 10 cents on AWS, and the price goes down the more i use, not UP.

That's tiered pricing i can get behind.

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If they want to...

lenohere 24th Jun

Push users to the Prepaid market, They are sure doing a very good job with these prices.

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ONLY costs them about ONE CENT per GIGABYTE!!!

TheRayBan 24th Jun

The crazy thing is, that it only costs these providers about ONE CENT per gigabyte. So it comes down to these large providers do not want to invest in upgrading their networks to support the demand of modern devices. They are killing innovation and their main goal now is large profits and nothing else. Third world countries are advanced than our here in USA.

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RE: Leaked memos confirm Verizon's tiered data ambitions

ALISON SMOCK 25th Jun

Hmm oh well.. if they pull this on me when my contract is up.. its OFF to another carrier who does not play these games. I will NOT be toyed with on this issue.. and I am not even a bit phone internet user.

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RE: Leaked memos confirm Verizon's tiered data ambitions

nshubin1@... 27th Jun

switch to virgin mobile, i am soon as my verizon contract is up! on virgin mobile unlimited everything for 50.00

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RE: Leaked memos confirm Verizon's tiered data ambitions

dhays 27th Jun

I'll wait for the T-Mobile AT&T merger to find out how it affects me directly. I don't do business with Verizon. At present I have an unlimited plan for ~25/mo.

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RE: Leaked memos confirm Verizon's tiered data ambitions

opcom 27th Jun

That's the end of any business I may have considered with them.

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RE: Leaked memos confirm Verizon's tiered data ambitions

papagrass 3rd Jul

I'm a Verizon customer with a family plan that consist of 5 people and 3 of those are teenagers who love to surf the web. Now if what you say is true that put me between a rock and a very hard place. I will be looking into this today because I'm due for up-grades and everyone wants smartphones.