Verizon CEO ponders shift to use-based mobile plan
Thu Jan 6, 2011 11:08pm EST
By Sinead Carew
LAS VEGAS (Reuters) - Verizon Wireless is experiencing a boost in higher-margin wireless data subscribers thanks to a $10 limited data service it is offering, potentially encouraging the top U.S. operator to make such an offer more permanent.
While rival AT&T Inc had eliminated unlimited data services and been selling useage-based data pricing plans to smartphone customers for months, Verizon Wireless has yet to follow suit.
While tiered pricing with limited data use means heavy data users have to pay more, lower-level plans are seen encouraging people who have never used data services to try it out.
Late last year, Verizon Wireless took a tentative step in that direction with a $10 plan for data downloads limited to 150 megabytes in a temporary promotion, which lasts until the end of January.
Chief Executive Daniel Mead said the offer had helped smartphone and data service adoption, especially among customers who subscribe to mobile family plans.
"We've been very encouraged by that. We think it's helped us in terms of getting more members of a family using data," Mead told Reuters at the Consumer Electronics Show.
The executive said the promotion would end in January but said the company is evaluating if its success could lead to a more permanent plan.
"We're considering every option," he said.
Smartphones and data services have become key to growth in a U.S. market where most consumers already own cellphones but a smaller number pay for services such as mobile Web surfing.
At CES, Verizon showed off 10 new devices it plans to sell in the first half of this year for a high-speed network it is building based on Long Term Evolution (LTE) technology. It said the network offers a speeds ten times or more faster than its older service.
Mead, who took the top job at the venture of Verizon Communications and Vodafone Group Plc late last year, said the new LTE service and devices would help spur increased consumer demand in data.
"We're coming into an important phase of growth. I think we're going to see customer growth. We're going to see customer engagement in different ways," Mead said.
He said the services will also keep Verizon ahead of its rivals, allowing it to hold onto its market lead.
"It's going to be a phenomenally competitive offering." he said. "I think you're going to see the other carriers are going to have a lot of work to do chasing us."
(Editing by Lincoln Feast)