Verizon decided to finally join the rest of their competition in offering an unlimited data plan last month. They debuted their “Verizon Unlimited” plan which gives users unlimited talk, text and data for about $80/month. It’s actually pretty competitive when you compare it to T-Mobile, Sprint and AT&T. But analysts are now weighing on this decision, and seeing if this is a good thing for Verizon, or if it’ll have a negative impact. And well, some analysts believe that it will have a negative impact, in the long-term, but in the near-term it should help Big Red bring back some customers and stop their streak of losing customers each quarter.
BTIG analysts are stating that they think this new unlimited plan will cost Verizon about $3 billion of value, which is around $0.75 per share. Of course, this is just based on analysis from the analysts, who don’t always have the full picture, but it could cost Verizon a pretty penny. Many may wonder why it costs Verizon at all, and the answer is simple. Verizon used to get a ton of money each month from overages, people going over their data limits. They also didn’t use as much data, as many people didn’t want to worry about getting charged overages. With unlimited those are both gone. Analysts also believe that Verizon’s time of using their network as leverage over their customers are over. As they too believe that all four of the national carriers have great networks, and are mostly the same in terms of reliability. Of course, some areas will have better coverage than others, but that is actually all down to the spectrum that each carrier has.
On the bright side, analysts do believe that unlimited data is going to give Verizon the leverage they need to compete with T-Mobile, and Sprint. Verizon currently allows their customers to watch video in its native resolution and offers 10GB of 4G LTE Mobile Hotspot to all their customers. T-Mobile only recently changed their T-Mobile ONE plans to offer that, and Sprint throttles music, videos and even game streaming, as well as offering 2G Mobile Hotspot speeds. Unlimited data is back, but for many people, this is not the unlimited data that everyone knew and loved.