Editorial by Dan Seifert on Tuesday June 12, 2012.
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This morning, Verizon Wireless announced its new Share Everything Plans, which let customers share one data plan with up to 10 different devices. These new plans caused quite a stir among Verizon customers, as many saw it as a way for Verizon to charge more for their services each month. But, if we analyze the new options and compare them to Verizon's current plan options, the new plans carry a lot of value, and will likely save the average customer money over the long run.
For starters, let's do a quick recap on what the new plans entail. The Share Everything Plans, which will be available starting on June 28, will be offered to both individual and family plan customers. There are two steps to choosing the plan: determine which kinds of devices and how many you will have, and then choose how much data you want to share between all of your devices. Smartphones have a base cost of $40 each per month, while feature phones run $30 each per month. Mobile hotspots and USB modems have a base cost of $20 per month, and tablets are $10 per month. The data options start at $50 per month for 1GB of data, and go all the way up to $100 per month (in $10 per month increments) for 10GB of data. Two gigabytes costs $60 per month, 4GB is $70, 6GB is $80, and 8GB is $90 per month. Should you need more than 10GB of data, you can add another 2GB for an additional $10 per month. Also included are unlimited voice minutes and unlimited text, video, and picture messaging for all of the lines on the plan.
The first thing that many people see with these new plans is the $50 per month charge for 1GB of data, which sounds outrageously high. Taken individually, it is, but if you can look past that, that is where the real value is, especially for smartphone customers.
The biggest value in the new plans is for customers with multiple smartphone lines on their account, i.e. your average family plan. Currently, Verizon offers four tiers of family plans, ranging from 700 minutes on up to unlimited service. To keep things simple, we will use the 1400 minute plan in our comparison, since that falls in the middle of the options and is likely what many customers are currently on. A 1400 minute family plan with three smartphones and unlimited text messaging currently costs a Verizon customer $220 per month ($100 for the voice plan, $30 for text messaging, and $90 for the three data plans at 2GB per phone). Under the new plan, an account with three smartphones would pay $200 per month and get unlimited voice service in addition to the unlimited text messaging and 6GB of data service. Even sweeter, that 6GB of data can be apportioned among the three lines however the customer wants, and any of the smartphones can also use tethering and mobile hotspot services at no additional charge (Verizon currently charges an additional $20 per line per month for mobile hotspot service). If we were to do an apples-to-apples comparison with unlimited voice services on today's plans, the difference is even greater. Unlimited voice and text messaging and three smartphones costs Verizon customers a whopping $290 ($170 for voice service, $30 for text messaging, $90 for the smartphone data plans) per month today - $90 per month more than the new plans. That's a pretty significant difference if you ask me.
Though family plan customers will likely see the biggest savings on their monthly bills under the new Share Everything Plans, individual customers can find a lot of value in them as well. Right now, a smartphone customer on Verizon pays a minimum of $90 per month and gets 450 voice minutes, unlimited text messaging, and 2GB of data service. The new plan's minimum is the same $90 per month, but it includes unlimited voice minutes and drops the data allotment to 1GB per month. But, if we look at the 2GB data option, that's where the value is. For $10 more per month, customers get unlimited voice service, unlimited text messaging, and 2GB of data that they can use however they would like, including using their phone as a mobile hotspot. Need to double your data? That's only $10 more per month. Own an LTE-equipped tablet and want to use your 2 or 4GB of data with it? That's another $10 per month. Right now, if you wanted LTE service on a new iPad from Verizon, you are looking at paying a minimum of $20 per month, and you only get 1GB of data to play with. The new plan lets you have a smartphone and a tablet with 4GB of data service for $120 per month, giving you unlimited minutes and more data to play with for only $10 more than today's options.
Where do the new plan options fall apart? For those who are still using feature phones, or have a family plan with a mix of feature phones and smartphones on the account, the new plans can cost more per month. If a customer has more feature phones than smartphones on their account, then the new plans are not as valuable, since feature phones don't require data service today. A four-line, 1400 minute plan with two smartphones, two feature phones, and unlimited text messaging runs about $200 now, while the new plan will cost about $210. The difference is even greater if there is only one smartphone and three feature phones on the account. The new plans do offer unlimited voice minutes, so that is a bonus there.
While feature phone customers might bemoan the new changes for now, as more and more users gravitate towards smartphones, the new plan options will become more and more valuable. Others might complain that Verizon is forcing unlimited voice service and text messaging upon them, and not giving them the option to just share the data plan alone with all of their devices. In an ideal world, this would be great, since customers that don't make a lot of voice calls or use text messaging could choose a lower voice plan and then just pair that with the new data options. But, unfortunately, that is not the case, and users will still be forced to carry voice plans with their smartphones for the foreseeable future.
It will be interesting to see how the other carriers respond to Verizon's new plans, as well. AT&T has already stated that it will launch shared data plans of its own at some point in the future, so we will have to see if it mirrors Verizon's options or if it comes up with different plans altogether. T-Mobile and Sprint have been mum on the subject, but it would be surprising if either carrier didn't come up with shared data plans of their own eventually.
Either way, most Verizon customers should be happy at today's news, since they can either save money, or get more for their money than they currently do. Those that are still hanging on to their grandfathered unlimited data plans will have to give them up to get into the new plan structure, and Verizon will require anyone that has an unlimited plan to give it up if they want a subsidized phone once the Share Everything Plans are available later this month. Still, the flexibility offered by the new plans should make a lot of people happy, and it will likely get more people to choose a smartphone as their next device - something that Verizon is certainly counting on.
Update: Speaking to The New York Times, a Verizon Wireless spokesperson explained that users that have a tiered plan now will not have to switch to a shared plan when they upgrade to a new device, even if it is subsidized. Customers will be able to keep their current plans or switch to a new plan if they would like. It is not clear if new customers will be able to choose from tiered plans or the new shared data plans once they are available. What is certain, is that those with a grandfathered unlimited data plan will not be able to upgrade to a new device at a subsidized price and keep their data plan.
Dan is MobileBurn.com's Editor-in-Chief. Based in Poughkeepsie in New York, Dan can be found on Twitter as @DCSeifert.