Verizon CFO Fran Shammo told CNET in January that “promotions come and go” but Verizon is “not going to entertain” the possibility of an unlimited plan.
The problem is that’s not what consumers want to hear.
Take AT&T, for example. Big Blue did more than just entertain the idea of unlimited and has reaped the benefits.
At the start of this year, AT&T brought back its unlimited plan, using the offer as a way to draw customers to its DirecTV and U-Verse products. And the response has been impressive.
Three weeks after launching the program, AT&T reported half a million subscribers picked up on the offer. After two months and a little advertising, that figure jumped to two million.
Still, Verizon hasn’t budged. At an investor conference earlier this month, Shammo said flat out “the unlimited model does not work in an LTE environment.”
Last month, Verizon’s Vice President of Wireless Operations David Small, explained the carrier’s stance by saying Verizon is committed to educating customers about their actual data consumption patterns and helping them understand that the reality of “unlimited” plans might not be their best option.
And Small might be right.
Way down at the bottom of AT&T’s unlimited offer – deep in the 8-point font – the carrier warns that it “may slow the data” of users who consume more than 22 GB of data in a single billing cycle.
Even the Un-carrier T-Mobile says in the fine print of its unlimited plan that it “de-prioritizes” the data of customers who use more than 25 GB in a billing cycle.
These restrictions certainly sound a lot like limits on a supposedly “unlimited” plan.
But this isn’t a new issue. Consumers have already been educated about the meaning of unlimited – the hard way.
Last year, the FCC fined AT&T Mobility $100 million for misleading customers with the unlimited label when it “severely slowed down” the data speeds for those customers.
At the time, FCC Chairman Tom Wheeler said “consumers deserve to get what they pay for.”
But that message still hasn’t reached customers.
It doesn’t matter that 2G speeds are essentially worthless in meeting the usage demands (hello, video!) of most smartphone users. What they see is the word “unlimited,” and in the American “gimme” economy, that’s all that matters.
And this is where Verizon’s interests tangle with those of consumers.
For consumers, it’s all about (perceived) value. Bigger means better, and unlimited is the biggest you can get.
For Verizon, though, it’s all about the Benjamins, baby.
At that same March conference mentioned above, Shammo let slip that Verizon’s focus is currently on generating cash rather than pulling in the quick growth that unlimited and other promotions draw.
Given the hit Verizon is taking to launch go90 and bring it to profitability, that’s probably a prudent move. But whether or not that strategy will pan out in the long run against a strong competitor like AT&T – which, like Verizon, has a beefy network and good brand reputation – remains to be seen.
