This is HUGE and will destroy sales of iPhone... Verizon: Users Can Avoid Data Change By Paying Full Phone Price
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By Greg Bensinger, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Verizon Wireless, after announcing it would seek to phase out grandfathered unlimited data for millions of its customers, said there was one surefire way for users to keep their all-you-can-eat plans: Pay full price for their smartphones.
The carrier said Wednesday that third-generation customers upgrading to the high-speed mobile broadband network known as 4G LTE would soon be required to drop their $30-per-month unlimited data plan, likely forcing them to pay more to stream video, music and download photos. Verizon Wireless said the change will coincide with the introduction of plans that allow people to use multiple mobile devices on one of several capped-data plans it will unveil this summer.
In an email, a Verizon Wireless spokeswoman said customers willing to pay full price for a handset--allowing the carrier to avoid the costly subsidies usually associated with a two-year contract--could keep their unlimited data plans when upgrading to the speedier network.
Carriers have been seeking to limit the upfront cost they pay manufacturers for the handsets they offer in stores and on their websites. The discounts they offer customers in exchange for a two-year contract cut into profits and require sizable initial outlays.
The smartphones don't come cheap for customers either. A Motorola Mobility Holdings Inc. (MMI) Droid 4, for instance, costs $549.99 without a contract and a 16 gigabyte Apple Inc. (AAPL) iPhone 4S, which runs only on 3G networks, is $ 649.99. Both devices are $199.99 with a two-year data plan commitment.
Verizon Wireless has declined to give details of the new data-sharing plans, though it said customers had been requesting the option. "Customers will not be automatically moved to new shared data plans," said the spokeswoman, Brenda Raney. "If a 3G or 4G smartphone customer is on an unlimited plan now and they do not want to change their plan, they will not have to do so."
Over time, however, Verizon Wireless hopes to move all of its customers off unlimited data plans and into so-called tiered pricing plans that place caps on monthly usage. Carriers have capped usage to help limit congestion on their wireless networks and to extract more revenue from customers as they buy increasingly permissive data plans.
Verizon Wireless is co-owned by Verizon Communications Inc. ( VZ) and Vodafone Group PLC (VOD, VOD.LN).
-By Greg Bensinger, Dow Jones Newswires; 212-416-4676; greg.bensinger@dowjones.com
(END) Dow Jones Newswires 05-17-121712ET Copyright (c) 2012 Dow Jones & Company, Inc.
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