Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
Verizon Wireless made an interesting decision this week, announcing plans to begin hating kittens, freedom and Justin Beiber beginning June 28.
Or, at least you would have thought that is what the nation’s largest wireless carrier had announced by reading the responses to the carrier’s actual announcement that it was changing up its rate plans. You know, the pricing structure people choose to select when they choose to become a customer of Verizon Wireless. Choose.
The basics of the move is that Verizon Wireless finally went forward with a new pricing structure that many in the industry have been hinting at for some time. A pricing structure that in some cases will cost consumers more than what they currently spend, and in other cases less.
The new structure is based around data and basically treats voice and messaging as the commodity service that it has become. Customers will select the number of devices they want to use and then select the amount of data they want those devices to have access to. Unlimited voice and messaging are included regardless of how much data is selected.
Seems rather easy, something that in general is not said anywhere near or around current wireless pricing structures. No longer do customers worry about peak or off-peak calling times or whether they are sending an SMS, MMS or TPS.
It’s now all about data.
Those who will pay less are obviously pretty quiet on the whole story, while those that will pay more are a bit more vocal.
Those on the more vocal side have predicted the move could “sink” Verizon Wireless in that somehow millions of consumers will flee the carrier because of the pricing change and go where? (Ah, hyperbole. It’s what makes the Internet go ‘round.)
Sure, the price plans will require an adjustment for consumers, which could result in some backlash, something that Verizon Wireless has become accustomed to. But, I am not yet ready to predict the demise of Big Red.
Personally, I think it’s a good move by Verizon Wireless and sheds light on the fact that the mobile space is now a mobile broadband game. I know some who have yet to jump on the mobile Internet/smartphone/Soul Train will continue to ask what all the hubbub-bub is about, but the future is data, and Verizon Wireless is simply leading the way. Choo choo!
However, as this path evolves, there will indeed be questions. For instance, as Verizon Wireless moves to VoLTE, which recent comments have suggested is not any time soon, how will those “data” calls be handled? If Verizon Wireless chooses to included unlimited VoLTE calling into their rate plans, will the data required to serve those calls be deducted from the minute bucket or be gratis? If gratis indeed, then the carrier might run into net neutrality issues if it then deducts data usage when a customer uses an alternative VoIP calling applications like Skype.
Then, how will it handle video, or more specifically video calls? I see a time in the not too distant future where video calls will be what everyone expects via mobile.
However, video is also a bandwidth hog that has forced carriers to move towards higher priced data plans. Will Verizon Wireless allow a carrier-branded video calling service slide by the data rules, or will consumers be dinged for the need to see who they are talking to?
And of course, trying to get people to think in terms of bits and bytes will continue to be a challenge. But, with this move by Verizon Wireless, it has become sink or swim for many of us luddites.
Regardless of how this all plays out, I am most excited because just about all carriers are eventually expected to follow similar models if they intend on making money. And hopefully this will result in the same hew-and-cry reaction that has become the staple of today’s mobile-centric, always connected society.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–The amazement that is watching Nokia’s continued struggles continues to amaze.
—Virgin Mobile USA’s recent announcement that it would begin offering Apple’s iPhone sans-contract for an unsubsidized price starting at $550 made waves. Not so much in the no-contract aspect, which it was beaten to the punch by Leap Wireless, but in its device pricing. The nerve of a carrier to not provide some sort of subsidy for a device, even if without a contract there is no way for that carrier to guarantee a return on that subsidy! For shame.
What garnered the most notice was the rate plan pricing structure that provides for 2.5 GB of un-throttled 3G data, unlimited messaging and 300 calling minutes for just $30 per month. Shazam!
Analysts noted that the biggest challenge for Virgin Mobile USA would be in convincing consumers that the initial buy-in, while steep, would be paid off within a few months when comparing rate plans prices with larger rivals. This challenge was most succinctly summed up by Current Analysis Wes Henderek, who noted in a research report: “Basic math shows that consumers will still come out ahead, but U.S. consumers don’t do basic math, …”
Indeed, quote of the year.
I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.
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