Verzion is making a number of pricing changes effective Monday, January 18. There’s some good news for heavy talkers, unlimited voice pricing is being reduced from $99.99 to $69.99 and unlimited talk and messaging is dropping from $119.99 to $89.99. Family plans see similar reductions. Prices for voice plans other than unlimited aren’t changing
However the news on the data front is not so good. A data plan will be required for anyone switching to most 3G capable non-smartphones (a.k.a. ” feature phones”) as either a phone change or a new line of service. There will be two available data packages; 25 MB for $9.99 /month ($500/GB) and “unlimited” (capped at 5 GB) for $29.99/month. The current $19.95/month, 75 MB option has been dropped. Smartphone purchasers will continue to be required to add the $29.95 unlimited option. Current users of 3G feature phones will not be affected unless they switch phones or renew their contracts.
On the one hand mandatory data plans might encourage users to actually use the web on their phones since they are paying for whether they use it or not. 25 MB isn’t much data so users who do more than a little browsing will quickly burn through the initial allowance. Verizon did reduce the overage charge on the $9.99 plan from 50 cents/MB to a semi-reasonable 20 cents/MB ($200/MB).
On the other hand it seems nasty to raise the monthly cost for customers who want to switch to one of Verizon’s hot selling feature 3G phones like the LG Env Touch, Env3 and Chocolate Touch. I suspect that the majority of Verizon feature phone buyers do not use data and that many opt for a 3G phone not because it has 3G, but for styling, “cool” factor or other features like a better camera, music player or QWERTY keyboard.
I actually think that these changes could hurt Verizon’s bottom line. Being forced to purchase a data plan that they have no intention of using with a recurring cost of $240 over the life of a two year contract won’t help with customer satisfaction or loyalty. It might discourage quite a few users from upgrading and thus extending their contracts. Out of contract customers represent potential churn, especially if competitors offer more desirable phones at a lower monthly cost. A lot depends on what the competition does. AT&T, Sprint and T-Mobile currently do not require data plans on feature phones and their optional data plans offer better value than Verizon’s. Unlimited data for 3G feature phones is $10/month on T-Mobile and $15/month on AT&T and Sprint. Assuming the others don’t raise data rates or make data plans mandatory on non-smartphones, switching operators could start looking mighty attractive to Verizon feature phone users whether they use data or not.