updated 11:10 pm EST, Mon January 11, 2010
Carrier to adopt usage-based pricing
Verizon Wireless is allegedly set to change its pricing structure for mobile data plans as the company transitions to the 4G LTE standard, according to a Washington Post report. Although the company's current "unlimited" data plans are capped at 5GB per month, with overage rates of $0.05/MB, the upcoming business model is said to adopt a form of usage-based pricing across the entire range of data consumption.
"The problem we have today with flat-based usage is that you are trying to encourage customers to be efficient in use and applications but you are getting some people who are bandwidth hogs using gigabytes a month and they are paying something like megabytes a month," said Verizon CTO at a CES interview. "That isn't long-term sustainable. Why should customers using an average amount of bandwidth be subsidizing bandwidth hogs?"
Verizon has announced plans to offer 4G service in select markets before the end of the year. The 4G network will also expand the list of supported devices beyond just cellphones and USB modems. Verizon is expected to connect other third-party products, such as TVs or other gadgets, through its open development initiative.
"The whole paradigm of how we sell devices into the public is changing," Lynch said.
Although Verizon has pointed to changes in the 4G data pricing, it has yet to announce specific details.