Thursday, May 17, 2012

Verizon to eliminate grandfathered unlimited data plans

Get ready for a burst of anger: Verizon Wireless Communications CFO Fran Shammo, while speaking at the 40th J.P. Morgan Technology, Media and Telecom conference on Wednesday, announced that the carrier's grandfathered unlimited data plans are about to go extinct.

Verizon eliminated unlimited data plans last year, but allowed existing unlimited data plan users to keep them. It was similar to what AT&T did the year previously, when it became the first of the Big 4 to eliminate unlimited data plans.

Not only that, but users who later upgraded from a 3G device to an LTE device were allowed to keep their grandfathered unlimited data plans. However, Verizon has always made it clear that they could change direction at any time, and here we are.

The move will be made in concert with Verizon's Family Data plans, which the company said earlier it was targeting for mid-summer. The idea of the data-share plans, as Verizon is calling them, is to allow families and groups to share data just as they share minutes.

That doesn't sound like a bad idea, in and of itself. However, it wasn't apparent before that Verizon was going to tie the data-share plans into eliminating the grandfathered unlimited data plans.

Shammo said, "Everyone will be on data share. When they migrate off 3G they will have to go to data share. That is beneficial to us."

In case you think that means that if you migrate off of 3G to LTE NOW you will be exempt, the answer is probably not. To be clearer, as noted in the webcast: "So as you come through an upgrade cycle and you upgrade in the future, you will have to go onto the data share plan. And moving away from, if you will, the unlimited world and moving everybody into a tiered structure data share-type plan."

In other words: even if you've moved to LTE already, when your contract is up, you'll be "steered" into a data-share plan. We assume if, for some reason, you are not on a Family Plan, you'll still be forced into a tiered data plan.

In other words, within two years of whenever this goes into effect, unlimited data on Verizon will be dead.

This news is bound to upset those who have kept their accounts on Verizon to leverage the grandfathered unlimited data plans.

AT&T has, as noted earlier, also eliminated unlimited data plans. However, it has struggled to keep up with data demands, and throttles devices once they pass 3GB of use in a month. T-Mobile also throttles data after a user goes over their limit.

Of the Big Four, Sprint is the only carrier to still offer unlimited and unthrottled data. How long it will be able to maintain that remains in question; in addition, Sprint is moving from WiMax to LTE, with first test locations going online at mid-year.

Update: Verizon has clarified that, as we thought, after the company's data share plans are introduced, customers will lose their unlimited data plans when they get their next device.  However, that is only if the customer accepts carrier subsidy for the device.  It they pay the full, unsubsidized price for the new device, they can keep their unlimited data plan.

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