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Verizon opts to keep unlimited data plan in Its first LTE phone

Matt Hamblen | March 15, 2011
While Verizon Wireless will keep its unlimited data plan with the HTC ThunderBolt, its first LTE smartphone, some kind of usage-based pricing plan is expected this year.

FRAMINGHAM, 15 MARCH 2011 - The HTC ThunderBolt will arrive Thursday with an unlimited data plan for $29.99 a month, keeping the first LTE smartphone from Verizon Wireless in line with unlimited data plans for Verizon's current 3G smartphones, including the iPhone 4.

Many analysts had expected otherwise and said the carrier would use ThunderBolt as a way to end unlimited data plans, although that step could still occur in a future Verizon announcement.

Verizon spokeswoman Brenda Raney on Tuesday repeated earlier Verizon statements that Verizon "will move to some type of usage-based pricing this year...The unlimited smartphone plan in the [ThunderBolt] announcement this morning is all we are announcing right now."

In an interview, Raney said usage-based pricing doesn't automatically mean there will be an upper-end cap with overage charges, as its competitor AT&T has implemented. AT&T has two smartphone data plans: 200 MB for $15 a month (and $15 more for 200 MB in overages), and 2GB for $25 a month (with $10 more for an additional 1GB for overage).

Asked if usage-based pricing means there will be an upper cap, Raney said, "Not necessarily, but I have no idea of the pricing model."

Verizon CFO Fran Shammo told investors on March 1 that tiered pricing would be coming from Verizon probably by mid-summer, adding: "We will be launching the HTC ThunderBolt very shortly here and then that will give you a flavor of our tiered-pricing structure going forward."

If the unlimited data plan in the ThunderBolt announcement truly represents a "flavor" of tiered pricing as Shammo hinted, then perhaps Verizon will continue unlimited data plans for some time. But that seems unlikely given his other comments.

Shammo also told investors on March 1 that the unlimited $29.99 option would remain in place for the iPhone 4 and other 3G smartphones for the time being to avoid putting up a barrier to new customers, but he added, "that was never a long-term strategy."

Continuing unlimited data plans at any carrier seems unlikely, analysts have said, because of the explosion of data from video on smartphones, which is expected to worsen with LTE speeds and faster smartphones, many with dual cameras.

"Everyone knows unlimited data on wireless networks is unsustainable," said Jack Gold, an analyst at J. Gold Associates, reacting to Shammo's speech.

If the unlimited data plan for the ThunderBolt stays in place for a while, unlimited plans could also apply to three other LTE smartphones coming from Verizon: the LG Revolution, the Droid Bionic 4G and the Samsung 4G LTE.

 

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