Tuesday, May 22, 2012

Wireless Carries Getting Rid of Unlimited Data Plans

Story first appeared in USA Today.

Brace yourself, parents: You may have to share your monthly wireless data allotment with your Netflix-loving kid.

In a bid to sell and connect more devices to their wireless networks — and generate more money per subscriber — major carriers are preparing to introduce "data share" plans that will likely require more coordination among family members.

In such plans, customers will pay for a fixed bucket of monthly data and share it among family members. If you live alone, the data in the bucket can be shared among various devices capable of receiving over-the-air signals, such as tablets, smartphones, security monitors in the car and other connected devices. For example, a customer can choose a plan with 5 gigabytes for two devices, instead of 3 GB for one.
A typical current wireless family plan allows you to share voice minutes, but any data allotment has to be assigned to individual devices.
The changes come as the industry is trying to improve profit margins even as companies invest heavily to build out the next new generation of fast wireless networks, called 4G LTE. As consumers' appetite for data grows unabated, the carriers are tinkering with their data plans to maximize revenues and also to bring in new waves of users who still are using call- and text-only phones.

Verizon Communications, which owns a controlling stake in Verizon Wireless, confirmed to analysts Wednesday that the wireless carrier will introduce a data-share plan and phase out unlimited data plans for customers who renew their contracts or upgrade to new phones. Customers have told Verizon that they want to share data, similar to how they share minutes today. They are working on plans to provide customers with that option later this year.

AT&T has said in recent days that they will introduce a similar plan.

Sprint, which has been promoting unlimited data plans, declined to comment.

Verizon and AT&T didn't elaborate on pricing or details of their data-share plans. But analysts say they'll be structured in a way to make it easier for customers to add new devices and expose more people to surfing the web or streaming a movie while on the move and away from Wi-Fi.

Now, if you buy another (wireless) device, you buy another data plan. A vast majority people don't want that approach. People don't want to pay a full price for a small percentage of data used. But it makes sense if you add a tablet or a child to your plan.

Such plans exist in Asia and Canada. And the changes reflect the carriers' vision of where their future growth will come from.

Phone carriers similarly introduced family share plans for voice calls, and that broadened their base of cell phone-toting customers. With the explosion of demand for data, the carriers are looking to replicate the strategy.

If a carrier can keep a family satisfied with a data plan that makes adding new devices easy, it'll discourage customers from fleeing to a competitor, a constant source of concern for the industry. The motivation is to get everyone data-oriented. Once you get customers sticky to data, they have to keep it.

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