Verizon Wireless today announced the addition of Share Everything plans. Under Verizon’s new plans, available starting June 28, a smartphone customer would pay a monthly access fee of $40 that includes unlimited calls and texts, and a fee of $60 for two gigabytes of data, which could be shared with up to 10 devices.
Verizon’s new plan replaces nearly all of the choices that new customers currently have. Existing customers don’t have to switch from their current plans, but some with multiple phones and devices and who use a lot of data, such as watching videos, may find cheaper prices under Share Everything. Or not.
Today Verizon customers pay $30 for 2 gigabytes of data and $40 for the cheapest voice plan with 450 minutes of talk time and another $20 for unlimited text messages ($90/month total). But if a customer also wants to connect a tablet computer today they have to pay another $30 a month for another 2 gigabytes plan, leading to a total bill of $120 per month.
For a customer who needs a combined data allowance of 4 gigabytes for their tablet and their smartphone, the total fee, including voice, would still be $120 under the new plan. Roger Chen at CNET notes, Verizon’s old smartphone plan with 450 voice minutes, 1,000 text messages, and 2GB of data costs $80 a month. Add an iPad 2 with a 2GB plan for $30 a month and that takes you to $110, which is $10 less than the new $120 shared plan.
Verizon charges a monthly fee for each device, ranging from $40 for each smartphone, $20 for a laptop, and $10 for a tablet. The shared data fee is an additional charge. It ranges from $50 for 1GB to $100 for 10GB. Each additional device requires another access tariff.
Spectrum efficiency typically doubles about every 30 months. LTE is profitable for phone companies because it can cram twice as many bits (or users) per sector, enabling LTE cost per user to be half that of earlier HSPA or EVDO service.
The cost of cellular basestation gear is also going down. Expensive, bulky basestations are being replaced by smaller, lower power gear that costs less and integrates components and modules, lowering capex and maintenance costs.
Verizon had a 42.2 percent EBITDA margin on service revenues last year. Shared data plans seem likely to increase that margin.
In the United States, there’s little competitive pressure on Verizon. AT&T doesn’t have excess spectrum so it won’t lower fees and Sprint doesn’t have their LTE network in place.