Verizon Wireless has revamped its pricing plans, betting that customers will pay higher rates for service in return for increased data allowances and other features.
Verizon’s cheapest, or “S,” plan will now offer 2 gigabytes of shared data for $35 per month, up from $30 for 1 GB, while the medium “M” plan will offer 4 GB of data for $50 per month, up from 3 GB for $45. The “L,” “XL” and “XXL” plans will all see $10 increases with data allowance upgrades.
“Customers are using more and more data on our network,” Nancy Clark, senior vice president for marketing and operations, told Fortune. “We needed to build bigger data plans and the value is better than ever.”
The company said its average smartphone customer was using 2.7 GB of data per month as of April, up from 1 GB three years earlier. The average price per gigabyte at Verizon is falling 16%, excluding the cheapest plan, CitiResearch analyst Michael Rollins said in a research note.
“This is in no way a price increase,” Clark added.
As part of the revamp, Verizon is also adding features such as data rollover, eliminating high roaming fees in Canada and Mexico, and ending overage charges. “We’re solving customer pain points like fear of overages and bill uncertainty by putting the customer in control,” the nation’s largest carrier by subscribers said in a news release.
Verizon’s move leaves Sprint as the only carrier pushing aggressive price cuts. “Even though Sprint added more customers than Verizon last quarter, the fact that Verizon is comfortable raising rates is a sign Sprint’s discounts aren’t having much impact,” The Wall Street Journal said.
According to Fortune, Verizon “lately seems to be at least partially following the successful playbook for gaining customers” of T-Mobile, which, among other things, introduced a data rollover feature two years ago.
T-Mobile CEO John Legere questioned Verizon’s new plans, saying in a tweet, “Verizon creates pain points, then charges more to solve the pain points created.” Alluding to TV’s “The Sopranos,” he added, “Where have I heard this business model before?”