Verizon Wireless, America’s largest mobile telephone operator, confirmed last week that its “unlimited” bandwidth packages will not be available for the company’s upcoming 4G cellular services.
Speaking to the Financial Times, Verizon CEO Lowell McAdam said that users will buy “buckets” of megabytes.
“I expect people will have four or five or perhaps even more devices they will connect to the network,” he said, intimating that it would make sense to buy a common pool of bandwidth from which all devices can draw.
Preempting price concerns, Lowell also commented that the price of carrying data over the firm’s fledgling LTE network is already one half to one third the cost of delivering the same information on their 3G CDMA network. Further, Lowell said, the company intends to transition to Voice Over LTE (VoLTE) by 2012, which would bring the company’s voice network on the level with data when it comes to pricing–another substantial savings.
Verizon’s LTE network, along with compatible aircards and USB dongles, is expected to reach 30 or 40 markets by year’s end. LTE-based phones, meanwhile, aren’t expected until the spring of 2011.
What is LTE?
Built as the successor to third-generation GSM, the radio technology used by AT&T and T-Mobile, LTE is a fourth-generation wireless standard designed for high throughput and low latency over large areas.
Of the four carriers in the United States, Verizon Wireless and AT&T have already begun developing their infrastructure for introduction later this year. Both expect to complete their deployments by 2012 or 2013.
T-Mobile, meanwhile, does not own a slice of the radio spectrum necessary to begin deploying an LTE network, nor has the company announced definitive plans to lease that spectrum from other holders. For now, it appears as though T-Mobile may continue its push to deploy 20Mbit (or faster) HSPA+, the final and fastest version of GSM’s 3G specification. Though HSPA+ may be competitive with LTE in terms of network performance, it remains unclear how expensive it will be for T-Mobile to operate such an infrastructure.
Finally, Sprint has committed its efforts to a competing 4G technology known as WiMAX. Through a partnership with a wireless data company known as Clear, the two firms are expected to expand their network to 30 million customers in 27 markets by the end of the year. Actual speeds on the Clear/Sprint WiMAX network run between 2400 and 4800Kbit (300-600KB/s). This bet on WiMAX is not concrete, however, as Sprint has already acknowledged that a switch to LTE would not be overly difficult, nor out of the question.
The Icrontic Viewpoint
Robert Hallock
Did Verizon’s CEO just suggest that I would own four or five LTE devices? Where will I hide all those netbooks and smartphones?
It’s simple: Verizon hates being seen as a dumb pipe, so they’re using the introduction of a super-fast 4G network to kill off the concept of “unlimited bandwidth” (which is really only 5GB on Verizon anyhow). Instead of an all-you-can eat plan, we’ll probably be forced to buy chunks of data in sizes like 250MB, 500MB or 1GB. Who knows what the price will be (I’m not holding my breath).
I love it when companies try to gussy up a reduction in service as a “convenience.” Hell, maybe it will be more convenient to share a data plan amongst the half dozen mobile Internet devices Lowell suggests I might strap to my belt by 2012, but that hardly abrogates my desire for unlimited bandwidth.
Verizon ultimately needs to realize that their switch to a 100% IP-based network makes them an ISP. No more, no less. It would behoove them to stop acting like a special little snowflake that is somehow more privileged or valuable than a comparable wireline service; it’s a philosophy of entitlement that makes them look ridiculous when their CEO is unchained to spew utter rubbish like this.
CB Droege
People will always want to have the option of paying monthly for unfettered access. Everything has been moving towards that for years. More and more services are switching to unlimited service. From long-distance calling to Internet access to MMO subscriptions, people just don’t like to pay per minute or megabyte if they can avoid it. 4G will not change that. I honestly don’t even understand how anyone would think that it could.
Quinton Healy
Don’t shoot me, but I think it might be better for the average consumer if the pricing is done correctly.
For an average mom or dad that just wants to access the Internet a few times a day to check weather, scores, Facebook, or Twitter, paying a ton less for the basic package will benefit them. For those us that use the phone as a portable computer, or even tethered modem, it might become a costly proposal.
A delicate balance must be made between the packages and the prices. It almost needs to be based on the cost to provide the data. If it’s, just for argument sake, a penny per MB, then charge $5 for 100MB (5 cents per MB). At the top end, charge $5 for 500MB (1 penny per MB). Either way, there still needs to be an unlimited for those that live off their 4G devices. Even if it’s $100.
The key is whether or not most customers will benefit from the tiered pricing. Look at DSL and Cable packages: DSL has tiered pricing based on speed, not bandwidth. Verizon had better conduct a ton of research and advertising on this before rolling this out. The loudest complainers are bound to be those that are the most technically savvy.
Matt Jancaitis
The thought that consumers would willingly group more devices together, which will use more data, while simultaneously refusing unlimited packages is more than laughable. . . it’s absurd. With this move, Verizon proves ever more how backwards the United States’ mobile landscape is. Can you imagine charging per MB when you’re watching TV on your mobile? Thanks, but no thanks, VZW.
Brian Ambrozy
People will never be able to accurately gauge what their upcoming month’s [data] usage is. Therefore, the anxiety that comes with not knowing if you might accidentally use too much data or too many minutes in the coming month is a huge turnoff to consumers. Having unlimited bandwidth is, in reality, having the security of knowing you’re not going to get hosed by some accidental overage. People are willing to pay for, and should be granted access to, that security.
Ryan Wilsey
Mobile carriers used to get flack for having “unlimited” plans with 5GB caps, now they want to drop the unlimited façade all together. I understand that this might make sense for your average blue collar consumer that occasionally checks their email or the weather, but what about the data-hungry mobile gamers, the technically inclined, business execs and more?
A “pay-per-meg” plan may have worked in the ’90s when there wasn’t much data going around, but if 4G really is faster and cheaper to distribute, dropping support for unlimited plans makes about as much sense as asking your customers to find another carrier to support their lifestyle.
Adding upon that: while most users are probably individual customers, I’m sure that enough families have multi-device shared plans to make this “limited data bucket” idea even less appealing, or feasible.
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