We already know that Verizon joined AT&T in 2010 by ending unlimited data plans. And this past Wednesday, they took it a step further by announcing that those who are still under a grandfathered unlimited data plan will be forced into a limited data plan when they purchase a new subsidized device. Verizon clarified later in the week saying that those who purchase unsubsidized upgrades can keep their unlimited plan. However, this isn’t a cost effective method for 99% of organizations.
CFO Fran Shammo announced the change at J.P. Morgan’s Technology, Media and Telecom conference. Verizon will soften the blow with mobile data-sharing among different devices in the plan. Initially, Verizon expects this to be revenue neutral.
Why Verizon Is Eliminating Unlimited Data Plans
Telecom carriers have been grappling with bandwidth constraints and network congestion as subscribers consume more data. This is due to constraints on available bandwidth and widespread adoption of smartphones, devices that are less efficient than the first generation of Blackberry devices, and data intensive mobile apps and subscribers’ displacement of voice services with mobile data. Telecom carriers are looking for ways to pay for their investments in the next generation networks by charging more for data plans while seeking to free up bandwidth by limiting those usage plans.
In addition, subscribers have been reluctant to pay for more than one mobile data plan. This behavior has put a cap on carriers’ mobile data revenue as subscribers cling to their unlimited data plans, and they replace laptops with tablets that rely on Wi-Fi rather than mobile data plans.
Implications of Verizon’s Change for All Enterprises Not Just Verizon Customers
Verizon’s move to eliminate “grandfathered” mobile data plans is likely to be matched by AT&T since it also has moved to tiered pricing and announced that it will be offering shared data plans for users. Sprint has used unlimited data plans as a way to attract subscribers, but data pooling between multiple devices could prove to be a more attractive option – one that Sprint likely won’t be able to match under an unlimited use plan.
Prepare for Change Regardless of Who Your Provider Is
Enterprise customers should expect grandfathered unlimited mobile data plans will be ending for them as well. The end of unlimited mobile data plans requires policy updates to set expectations on how much data employees consume. Pooling of mobile data requires more accurate inventory, tracking and reporting of data usage to ensure that employees have visibility into their mobile data consumption and managers have the tools to analyze consumption patterns. Verizon expects that it will see increases in revenue as subscribers consume more data and increase their data plan allotments.
Are you prepared for these changes?