On Wednesday, Verizon announced their new data plans that went into effect today (July 7th). While Verizon said they were not raising prices, they actually did raise them. However, as analysts have pointed out, Verizon lowered the cost of data per gigabyte on these plans. While all the plans went up in cost, they did also add more data. Making it a slightly easier pill to swallow, for customers. Verizon also added some other features like Safety Mode and roaming in Canada and Mexico to these plans. Something that their competitors already offered. As expected, T-Mobile’s CEO, John Legere and Sprint’s CEO Marcelo Claure were not quiet on the topic.
Yesterday, we noted that Legere was not a fan of Verizon’s new plan – other than the fact that it’ll drive more customers into T-Mobile stores. But now, Sprint has also joined in on the fun. Claure tweeted “GREAT strategy @Verizon: Step 1: Raise Prices Step 2: Tell them you aren’t raising prices Step 3: Tell them to be thankful #SwitchtoSprint.” Now everything that Claure and Legere said in their tweet storms were completely true. Verizon also decided to promote the #IGotVerizon hashtag on social media to promote their new plans. Although, the campaign didn’t go as well as they had hoped. With many users tweeting about their bad experiences with the company, and wanting to switch to a competitor.
Analysts see this move from Verizon as a way for the company to better monetize their customers. Especially when it comes to Safety Mode, which is a way to avoid overages if you are on Verizon’s two larger data plans. If not, that’s another $5/month, and Verizon will throttle your speeds to 128Kbps. Wells Fargo Securities wrote in a research note that the new plans from Verizon “is acting more ‘me too’ to meet some of the perks which Verizon’s competitors are already offering.” One of the big “me too” features that Verizon added was Carryover Data. Although they basically copied AT&T’s version, where the data is carried over for one month. Just one month. Unlike T-Mobile’s Data Stash which carries for up to a year. The Wells Fargo Securities analysts continued in their research note stating that “while an increase in the monthly recurring charge is a positive for APRU – with things like Data Rollover [Carryover Data] and Safety Mode offered – there are more opportunities for customers to be smarter with their data usage and limit the upsell capability of this ARPU.” ARPU or Average Revenue Per User is a really popular metric for wireless carriers. It helps them see what their average revenue is, and by raising that amount, it keeps shareholders happy, especially when they add a million or more customers in a quarter.
Verizon’s new data plans and new My Verizon app went live today. So far Verizon hasn’t shared any numbers about how many have switched versus those that stayed on the old plan. We likely won’t hear about that until the Q3 2016 conference call, which is slated for sometime in late September or early October.
