AT&T and Verizon Wireless have both ditched unlimited data plans and the new tiered plans are likely to segment the market between high-end and low-end customers.
With both AT&T and Verizon earnings this week, analysts will largely be focused on smartphone data plans and the impact on churn rates and future revenue streams.
For starters, Verizon's move to tiered data plans is welcome news for AT&T, which moved earlier to ditch unlimited plans.
Among the key points:
AT&T has a $15 a month plan with a 200MB cap that encourages feature phone customers to upgrade to smartphones.
Verizon's cheapest data plan is $30 a month with a 2GB cap. That pricing could discourage some customers to upgrading to smartphones, according to Barclays Capital analyst James Ratcliffe.
Churn rates for both AT&T and Verizon are likely to remain static as similar data plan structures will keep customers where they are.
In the big picture, Ratcliffe noted that AT&T and Verizon have effectively carved up the smartphone market between low-end and high-end consumers. The inflection point between where AT&T becomes more expensive than Verizon shows up at about 4.5GB of usage a month.
The wild card here is Sprint, which is the last carrier with unlimited data plans. It's possible that Sprint could acquire more high-end smartphone users.