Verizon and the pain of capped data

As of July 7 of this year Verizon Wireless will no longer offer unlimited data plans for smartphone users. Instead users will receive 2GB of data for the same price they were previously able to get unlimited. The change doesn't come as a surprise since AT&T made the same move 1 year and 1 month ago to the day.

AT&T customers have learned to cope with the plans but Verizon customers won't have the same offerings to help ease the pain. AT&T's offering gave 2GB at $25 and for those that truly used less data could go as low as $15 a month. Verizon starts at $30 and goes up from there.

Data plans:

2GB - $30/month
5GB - $50/month
10GB - $80/month

Tethering can be added to any plan, you can purchase 2GB of data at an additional cost of $20 per month.

Data plans w/ tethering:

4GB - $50/month
7GB - $70/month
12GB - $100/month

If you go over your purchased amount of data, it will cost you $10 per 1GB.

The one saving grace which has yet to be revealed (also yet to be confirmed) is the ability to share data. In my own personal situation this would help out greatly since I am the data hog and my wife does very little billable with hers coming in over the home wifi. I would come out ahead since currently I'm paying $60 in data, together we may total 5GB a month, in sharing I would only pay $50.

Verizon's approach to new family share plans is interesting. Rather than putting each line on a plan such as a $60 Primary Share and $9.99 Secondary Share, the new process will be separating the two. It's called Account Level billing and just as the name suggests the price plan will be associated with the account and not each line. If the data package is also on the account level then two lines would have the ability to share one 2GB plan.

Regardless of whether it's better or not, the transition will be confusing and annoying to the customer. Trying to talk about amounts of data on a broad band access card to a customer is already challenging since it's so objective. AT&T however has proved in a year that boxing in customers into restrictive plans won't be enough to make them leave.

Is AT&T buying T-mobile making it a monopoly?

AT&T is currently pursuing approval of the acquisition of T-Mobile, the smallest of the 4 nationwide cellular carriers. It's becoming a heated topic in the telecom world gaining more opponents and supporters. In defending the deal AT&T is trying more and more tactics as Consumer Reports reported that AT&T thinks that less competition means lower prices.

AT&T's newest argument is that T-Mobile is quickly becoming irrelevant so the purchase of the fledgling company will hardly change the competitive landscape. When it comes to the nationwide carriers there are two types of technology that is used, GSM and CDMA. With a successful purchase of T-Mobile there will be only one GSM option, AT&T

Becoming the only GSM provider will this be enough to consider AT&T a monopoly?

There is the current debate in Washington on whether or not the purchase will at the very least create a duopoly. This of course considers Sprint as irrelevant making Verizon and AT&T the only two viable options. The question is though how much choice do customers need and what level of competition will keep prices at reasonable levels.

AT&T says that consolidation will create efficiencies thus keeping costs of operations at bay. The problem I have with that logic is Sprint/ Nextel, Cingular/ Suncom, Cingular/ AT&T, and Verizon/ Alltel. Any merger has it's own set of problems and at the very best has only a moderate amount of issues.

In a Fierce Wireless story AT&T rebutted it's most vocal oppent, Sprint by saying "To hear the opponents tell it, T-Mobile USA--with approximately 11 percent of subscribers nationwide, steadily declining market share, and no clear path to LTE--is all that stands between today's 'era of competition and growth' and 'an entrenched, anti-competitive duopoly.' (Quoting Sprint's filing) is implausible, to say the least,"

I agree that the writing is on the wall for T-Mobile, losing 99,000 subscribers in their first quarter this year is a very bad omen.

But buying T-Mobile is not the caveat to an anti-competitive climate but the continuation of one. Wireless subscribers face very little choice when looking at a nationwide provider. Most of the time the pricing structure is the same and varies little in the amount of minutes received.

Another frustrating aspect of the wireless industry is the "Lemming Effect." When one carrier increases the price or takes away what a customer gets then the others follow suit. Recently Verizon Wireless eliminated their 1 year contracts because their biggest competitor, AT&T, hasn't offered 1 years for quite some time.

T-Mobile hasn't been a true competitor but it has been a representation of what this industry needs which is an economy carrier. The hurdle for a discount provider is coverage, what every mobile subscriber wants. If a carrier can't be profitable then it can't reinvest in it's network which was a deathblow to T-Mobile since they have no hope of upgrading to LTE or 4G if you prefer.

Sprint is in a weird gray zone, they're not really a discount carrier but then again they're not a premium one either. Dan Hesse has done an amazing turn around job with Sprint but now it's gotten trapped in a vortex of multiple strategies. If Sprint decides to take hold of the discount position then they could own that space as T-Mobile leaves a void. Sprint doesn't have the greatest network but they do have one that with the right pricing structure could continue to nip at Verizon and AT&T's subscriber base.

But that's it! We're now talking about just three providers, 2 of which are almost identical except one has lousy service. So what's left?

For the carrier that got booed off stage at E3 when they were announced as the exclusive wireless provider for the newest portable playstation device, they will probably be able to buy their way into the largest carrier spot. Verizon and Sprint will acquire the ticked off T-Mobile customers who will refuse AT&T.

And the one big loser in this anti-competitive climate will be the wireless customer.