In a Bloomberg interview today, Verizon’s chief financial officer John Killian states:
“We will probably need to change the design of our pricing where it will not be totally unlimited, flat rate…”
Killian mentions that the company anticipates explosions in data traffic over their wireless networks as new phones are brought on to 4G networks. Verizon’s 4G network is expected to provide 10 times faster data rates than older networks, though Verizon have not yet announced the specifics in pricing or speed.
In a telling sign that carriers are moving rapidly to capture additional revenue as smartphone users fill the better part of the market, Verizon stated that they expect smartphone users to make up 70~80 percent of their customers over time, up from the current 17 percent.
As data usage and more feature-rich smartphone becomes the norm and smartphone instant messaging services becomes more widely adopted, carriers are switching revenue model from charging a ludicrous amount on SMS/MMS packages to charging as much as possible for data services.
No word yet on if Sprint or T-Mobile, the next two largest carrier in the United States will follow suit, or continue their flat rate plan to differentiate their offering to more value-conscious consumers.
Personally, I was very disheartened to read about AT&T’s recent introduction on tiered data rates, and was not surprised that Verizon is now considering to follow-suit. Though there’s no doubt that infrastructure in the United States are vastly larger and more expensive to maintain then counterparts in Europe or Asia, my mind is always blown when I’m traveling abroad and I spend a noticeably smaller amount on my wireless usage (unlocked phone + SIM card = done).
Sensible, clear, and easy pricing are slowly being thrown out of the window. If you’re a cell phone user, be prepare for more confusing tiers, surcharges, overages, and fees. Welcome to the future of mobile data.