Verizon Wireless is rolling out lower price plans on Monday that could shake up pricing from other carriers.
Verizon calls the new pricing a simplified way to approach the market. The carrier is reducing its pricing structure from 40 plans to six single-line and eight family share plans, and it is reducing the number of handset SKUs it carries from 80 to about 50.
Data plans are now required on all 3G phones, and there’s a $10 minimum plan for 3G multimedia phones.
In a conference call with financial analysts today, Verizon Wireless President and CEO Lowell McAdam said the future is data and the new pricing strategies are an on-ramp to LTE.
McAdam reassured analysts that based on the usage patterns the carrier has seen around the Droid and expects from other upcoming devices, Verizon Wireless’ network will be able to handle usage patterns triggered with the new pricing. The company doesn’t feel it’s in a position to worry about usage caps right now, he said.
The company is focusing on three categories of phones: 3G smartphones, 3G multimedia phones and simple feature phones. Establishing these categories is important because there’s been a lot of confusion about what constitutes a smartphone, and this allows the carrier to better target customers and train sales associates, according to McAdam.
The carrier has more than 80 SKUs represented in its stores, plans to reduce that to 50 and hopes to significantly reduce that over time. Higher volume on fewer SKUs will help handset manufacturers focus their resources, as well as help Verizon focus its sales resources around customers’ questions, McAdam said.
Pricing on broadband access plans for laptops, air cards and netbooks do not change.
In a blog post today, Pali Research analyst Walter Piecyk says the price plan changes equate to a 30 percent cut to voice and a 50 percent increase to data, which effectively results in about an 8 percent to 10 percent cut to the more popular high-end rate plans. “The rate moves appear to be trying to increase the perceived relative value of data,” he wrote.
AT&T will need to move its prices down and while plans from Sprint and T-Mobile USA are still cheaper, they likely will want to widen the delta given their recent poor market performance, Piecyk says.
Specifically, Monday’s new pricing from Verizon includes a new Nationwide Unlimited Talk plan that allows customers to call anyone in the United States for $69.99 a month or a Nationwide Unlimited Talk & Text plan to call and send text, picture and video messages to anyone in the country for $89.99 monthly access.
Verizon Nationwide Family SharePlans also have new unlimited options. Nationwide Unlimited Talk Family SharePlans will be $119.99 monthly access while the Nationwide Unlimited Talk & Text Family SharePlans will be $149.99 monthly access.