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When Verizon Wireless(s vz)(s vod) announced its new shared-data plans in June, it should have enjoyed a big advantage over its arch-rival, AT&T(s t). Consumers had been demanding the right to pool data among their families and between devices, and Verizon was the first carrier to deliver. Instead, Verizon fumbled, and AT&T now knows exactly what to do with the ball.
Verizon’s new plans brought on immediate backlash, as it will be forcing all new customers onto the plans regardless of whether they have multiple data devices or not. In addition, those customers have no choice but to pay for unlimited talk and text as part of their monthly plans, which runs counter to consumer trends. Smartphone subscribers are using more data while cutting their usage of traditional voice and SMS. In that sense, Verizon is robbing Peter to pay Paul.
According to Jan Dawson, chief telecoms analyst at Ovum, AT&T had a month to watch Verizon’s missteps and Ma Bell has capitalized on them, even though it’s still offering essentially the same shared-data pricing structure. From Dawson’s commentary note:
“AT&T’s offering has almost identical pricing but some really important differences in the detail. Most importantly, AT&T isn’t forcing customers into the new plans, which is really important because they’re not the best deal for all customers. In addition, AT&T’s overage charges for data are much simpler, at a flat $15 per Gigabyte, compared with Verizon’s confusing two-tier overage charges. There are some subtle differences in the pricing, too, but they won’t make a significant difference to most customers.”
As my colleague Kevin Tofel pointed out some Verizon customers will see a lot of savings by signing up for its new shared plans. But not all customers will. If you’re just one dude with an iPhone(s aapl), you wind up getting less data and a big unlimited bucket of voice and text for which you may have little use.
AT&T’s pricing plans are very similar to Verizon’s. The rather confusing sliding per-device scale AT&T uses means that each plan comparison must be done on a case-by-case basis. But in general, if you have several smartphones on your plan and are consuming a moderate to large amount of data, AT&T plans wind up being cheaper. If you have relatively few devices (or a bunch of tablets and 4G hotspots) and are consuming more data, then Verizon winds up being the better deal.
The key though is AT&T’s plans are optional, which means the only customers who feel they will see savings will sign up for them. What Verizon did was completely revamp its overall pricing structure, and then gave customers a sharing option. AT&T merely introduced shared data as a new class of service plan that customers can chose from. The difference is critical.
Image source: flickr user B Rosen.