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Published: Wednesday, 6/13/2012 - Updated: 2 years ago

Wireless firm to phase out current plans

New pricing schemes push use of nonphone devices

BLADE NEWS SERVICES
The new plans offer unlimited calling minutes and text messages but charge more for extra data use. The new plans offer unlimited calling minutes and text messages but charge more for extra data use.
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NEW YORK — Verizon Wireless, the nation's largest cell-phone company, announced Tuesday that it is phasing out nearly all of its existing phone plans and replacing them with pricing schemes that encourage customers to connect their nonphone devices, such as tablets and PCs, to the Verizon network.

The revamped plans let families and other subscribers share a monthly data allowance over as many as 10 devices. It is the biggest overhaul in the price of wireless service since the cell phone became mainstream.

The idea is likely to be copied quickly, at least by AT&T Inc., which has said it is considering introducing shared-data plans soon.

Verizon's move "is the most profound change to pricing the telecom industry has seen in 20 years," said Sanford Bernstein analyst Craig Moffett.

For Verizon, the approach reflects a desire to keep growing even though nearly every American has a cell phone.

In the first quarter of this year, phone companies, for the first time, reported a drop in the number of phones on contract-based plans, which are the most lucrative.

To increase revenues, companies are betting on higher data use, which means getting more data-hungry devices on their networks.

Verizon's new "Share Everything" plans will be available June 28. They include unlimited phone calls and texts and will start at $90 a month for one smart phone and one gigabyte of data.

If used only with a smart phone, "Share Everything" prices are lower than for current plans with unlimited calling and texting but higher than plans with limited calling and texting. The plans are expected to push many toward spending more by including unlimited calling and texting by default.

QUESTIONS AND ANSWERS 
about the new wireless plans

Some questions and answers about Verizon Wireless' new Share Everything plans, which go into effect June 28.

Q: Will Verizon convert me to a new plan or can I keep my old plan?

A: Verizon won't switch you over to the new plan unless you ask. You can keep your old plan, even if you trade up to a new phone after that date and extend your contract.But for new customers, Share Everything will be the only alternative, with a few exceptions, starting June 28.

Q: What type of customer should move to the new plan?

A: If you already have unlimited calling and texting plans, the new plans are likely to save you money, especially if you have a family plan. If you have a tablet, the new pricing scheme could be a good idea too. Even if your tablet doesn't have a cellular modem, you may be able to take advantage of the plan, because it lets you create a "mobile hot spot" with your smart phone, so you can go online with your Wi-Fi-only tablet.

Q: What if I have an "unlimited data" plan? Can I keep it?

A: Yes. But Verizon will no longer let you move the plan to a new phone after June 28 unless you pay the full, unsubsidized price for it. For most smart phones, that will add hundreds of dollars to the price.

Q: I have a phone and tablet, but they're on different carriers. Can this plan work for me?

A: Probably not. The plan encourages you to use only Verizon-compatible devices. But if you have a Verizon smart phone and an AT&T iPad, you could cancel the AT&T service and use the hot spot mode mentioned above. It's just not as convenient as having direct cellular access on the iPad.

Q: I don't need a fancy data plan. I just want a regular phone, with no frills. Are the calling-only plans going away?

A: Almost. There will be only one plan for basic phones. It costs $40 a month and gives you 700 minutes of calling. Texting and data will cost extra. For this type of phone, there are cheaper, no-contract alternatives from many companies.

Q: I'm single and I want a smart phone, that's it. The cheapest Shared Everything plan looks pretty expensive at $90 ar month, and that's with just 1 gigabyte of data. Is there no alternative?

A: There's one cheaper plan, intended for first-time smart-phone buyers. It gives you unlimited calling and texting and just 300 megabytes of data a month. If you're frugal with data use, that will get you by. It costs $80 a month.

Q: Is this the future? Are all phone plans going to be this way?

A: For its part, AT&T is likely to go in this direction as well.

Unlimited calling plans provide peace of mind, but not many people need them, and the average number of minutes used is declining.

The savings will come to subscribers who add more devices. In such cases, the new pricing system will be cheaper compared with separate data plans for each device. Under "Share Everything," adding a tablet to a plan will cost $10 a month. Adding a USB data stick for a laptop will cost $20.From Verizon's perspective, offering unlimited access is an efficient use of its network, because calling and texting take up little capacity. Data use, on the other hand, consumes a lot of network resources.

Current Verizon customers will be able to switch to the new plans or keep their old ones, with one exception.

Those who have unlimited-data plans for their smart phones won't be able to move those to new phones unless they pay the full, unsubsidized price for those phones. (For example, an iPhone 4S that costs $200 with a two-year contract costs $650 unsubsidized, with no contract.)

Verizon stopped offering unlimited-data plans last summer. The industry is moving away from the plans because the data capacity of their networks is limited.


"The point of this is customer flexibility and value," Ms. Raney said. Brenda Raney, a Verizon spokesman, said customers with older phone plans would not be required to switch to a shared plan, even when they upgrade to a new device.

"If you have a smart phone and you don't have a tablet, but you're at the beach one day and your friend has a tablet, you can activate it right then and there because it's included in the data plan."

Under the new plans, subscribers can stop worrying about monitoring the number of calling minutes or text messages their families use in a month, but they'll have to keep a close eye on data consumption.

Verizon will allow subscribers to adjust their data allowance from month to month, but if they go over their monthly allotment, that will cost $15 a gigabyte.

When an account is close to using up its data, each device on the shared plan receives an alert asking if the customer wants to buy an extra 2 gigabytes of data for $10, Ms. Raney said.

But if they ignore this and go over the limit, they have to pay $15 for every extra gigabyte they use, she said.



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