If you’re among the millions of people who have a data plan through one of the traditional wireless carriers, you’ve probably heard about Verizon’s new shared-data plans that take effect on 6/28. After years of focusing its business—and profits—on voice-based plans, Verizon (likely to be followed by AT&T) is changing course to focus on the data services of the myriad mobile devices that have become so critical to how many of us access the content, applications and services we use for work and entertainment.
Make no mistake about it: this isn’t just a simple overhaul of Verizon’s pricing plans, but rather part of an industry-wide shift related to the changing nature of content and connectivity. That shift is what drives us at Macheen, too—but as I’ll explain in a minute, we have a very different idea for how connectivity needs to change as a result.
At first blush, it’s tempting to applaud Verizon for seemingly making life easier for customers who are increasingly using mobile devices to access data in the cloud. On the surface, Verizon’s new framework essentially reverses the proportion of voice and data charges (Verizon has published a pricing matrix to help customers understand the changes). As a result, approximately two-thirds of subscribers’ bills will come from data service—shared across as many as 10 devices on a single account—that covers activities like email, streaming music and video, or surfing the Web. The rest will come from voice and text fees. This sounds like it would be a boon for most consumers who want to attach phones, tablets and laptops to Verizon’s network.
But is it?
Dig a little deeper and what you find is that most users are likely to see their costs increase as they are presented with fewer options to tailor services that fit their individual needs.
The reason is simple: in its drive to increase the adoption of data-heavy plans, Verizon is scrapping its least expensive voice and text messaging plans in favor of unlimited packages with varying tiers of data services attached. Under the new framework, Verizon will charge a flat fee for unlimited voice and text messaging, depending on the device. To be fair, the new plans do have advantages for some users—but only if they’re already paying for unlimited voice and text service. The problem is that, fundamentally, Verizon is trying to get everyone to pay for the buffet even though they may want a la carte.
In my mind, Galen Gruman over at InfoWorld gets it right when he says, “it’s not fair to charge us more, or even the same, for services we use less…” Sure, some people may be okay with getting unlimited access to voice and text messages but wouldn’t it make more sense to let people have the exact services they want and charge them appropriately?
When you really dig into it, you see that under Verizon’s new plan, customers get a bunch of bundled services they may not even need—a super-sized plan designed to increase fees. It would be one thing if Verizon’s “Share Everything” plan was just a new option alongside the existing pricing model, but it’s a wholesale replacement that restricts the options for customers. We recognize there is a technical barrier unpinning the industry’s ability to deliver narrower services at a right-sized but profitable price. It should not be about super-sized bandwidth but about the apportioning of bandwidth and charging for value. That is what drives us at Macheen, where we enable our enrollment partners such as Dell and Lenovo to give their users more choice to right-size end-customer services according to need.