If you were hoping for unlimited data plans with Verizon Wireless’ 4G network based on Long-Term Evolution, it looks like you’re out of luck because the company will likely use tiered pricing, according to comments from CEO Lowell McAdam.
The company expects users will have four or five devices connected to the 4G network, so it makes sense to sell service in “buckets” of megabytes, McAdam said. This could be a shock for many current mobile data users who are used to paying about $30 a month for unlimited data (although, many still have a 5 GB hard cap). This shift comes even as McAdam said the cost of carrying 1 megabyte of data over LTE will be significantly cheaper than doing it over 3G networks. He also said he expects all voice traffic coming from LTE customers to be VoIP by 2012.
The company plans to have LTE networks lit up in 30 to 40 markets by the end of the year and it could have up to five LTE smartphone by this time next year, in addition to multiple USB dongles.
“People will be surprised by the number and variety of (4G) devices we will bring to the table,” McAdam said.
Why is Verizon moving away from unlimited plans even if 4G data will cost them less? Unfortunately, this seems to be a trend among the major mobile operators, as AT&T has said tiered pricing is inevitable and Sprint’s CEO Dan Hesse has echoed similar comments.
On the bright side, this could lead to a more equitable way of paying for data: if you don’t use a lot of mobile data, you won’t have to pay as much as the guy who uses his smartphone as a hotspot to download torrents all day long. Those who don’t use much won’t have to subsidize the heavy users – AT&T said 40% of its network capacity is being used by just 3% of its smartphone users.
[Via Financial Times (subscription required)]