Some more details trickling out about Verizon, which many believe will announce this week it will carry the iPhone: the carrier will offer the device with an unlimited data plan. The move could deal a further blow to AT&T, which currently sells the iPhone exclusively and with a data cap.
AT&T (NYSE: T) and Verizon both currently offer two different data plans that can be used with smartphones: AT&T’s bigger option gives users 2 gigabytes of data usage for $25/month, with a charge of $10 for every gigabyte over that.
Verizon, meanwhile, charges $30 for all-you-can-eat data: a tariff that will also be applied to the iPhone, reports the WSJ.
When AT&T introduced its caps it said that most users do not exceed the 2GB limit. But given the growth of mobile data usage, there are bound to be those who would rather pay a bit extra for the flexibility of not having to think about the meter while browsing; not to mention those who do use more already — a trend that has been more pronounced among iPhone users.
If Verizon’s network can handle the extra traffic that an unlimited service might bring — or if it’s just gambling that people will never use their phones for more than 2 GB of data anyway — offering all-you-can-eat data for $5 more could end up netting Verizon a much better return than AT&T’s service.
Verizon also comes out on top for tethering services: AT&T charges $20 for 2GB of data, while Verizon charges a bit more, $30, but the user gets 5GB of data.
On the cheaper plans, AT&T still has the better deal: it offers 200 megabytes per month for $15, with every additional 200MB another $15. Verizon’s plan, meanwhile, offers users only 150MB for $15, with the additional 15MB also costing $15 — although Verizon may well be offering the lower cap to encourage people to opt for the more expensive, unlimited option.
Those users who signed up with AT&T on unlimited plans have been able to keep those plans up to now; the caps only apply to those users who signed up after the caps were announced last summer or those who opted to switch. An unlimited option from Verizon would erase that as a barrier to moving.
It’s not clear whether Verizon will continue to offer unlimited data services indefinitely for smartphone users. Certainly the trend among operators has been to move away from competing on the cheapest unlimited data prices. If Verizon pulls off their customer acquisition strategy, though, that could end up triggering a price war.
Meanwhile, AT&T now appears to be in a scramble to pick up whatever iPhone wannabes that it can before the Verizon iPhone hits: the carrier is also selling the iPhone 3GS for only $49 when users take out a two-year data plan.
Perhaps it could go even lower: Some carriers in other countries, such as the UK, are offering the iPhone 3GS free with certain contracts.
The WSJ cites research that predicts Verizon, which has 93 million customers, could sell 12 million iPhones in its first year of service.
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