Your cellular plans are about to be shaken up, and they could cost you a bundle more to get data connectivity on your smartphones and tablets. Two weeks ago, AT&T's CEO Randall Stephenson predicted that within two years carriers would stop offering tiered voice plans and make customers buy unlimited voice and messaging, but would let users share data plans across multiple devices. Last week, Verizon Wireless announced just such a plan, which goes into effect on June 28 for new customers and customers who upgrade their phones, as well as anyone who wants to switch.
The new prices are quite scary: $50 for 1GB of shared data, versus $20 for 1GB on a tablet or $30 for 2GB on a smartphone in the old pricing. And if you hadn't signed up for an SMS messaging plan, you're now essentially forced to buy one, increasing your costs. Finally, the prospect of having to buy an unlimited-voice plan -- even though most people are talking less than ever -- is an unpleasant one, suggesting a hidden price hike for that less-used service. My first reaction -- as was the case for many others -- to the news was that the carriers were making a grab for more revenues, so much so that many users would reconsider if they really need cellular tablets, smartphones, and even regular cellphones.
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The truth is more nuanced. I ran the numbers for a variety of scenarios, and in most cases, it turns out that Verizon's new pricing will cost less, not more, compared to both its and its competitors' current plans. But some customers will pay more -- particularly those who don't now use messaging or data services. (The chart is on the next page.)
Light talkers and texters bear brunt of charges, as do heavy data users
What's clear is that if you aren't paying for text messaging, you will be -- even if you don't use the service (as I don't) but instead opt for a free alternative such as Apple's iMessage service or just email. It's also clear that heavy data users will pay a much higher price: If you max out your data allowance now on each smartphone and tablet you have, the cost for the new Verizon "Share Everything" plan's data will be double or even triple what you're currently paying.
On the other hand, if you're a moderate data user -- meaning no videos and limited streaming, via Wi-Fi at home and at the office -- your data costs will likely be no higher. Just be sure to check your own actual data usage for several months before deciding what allotment to get, and be careful in following the recommendations of Verizon's online planning tool; it favors very high data allotments.
It's a mixed bag as carriers set a high minimum fee per device (what Verizon calls an "access charge" that includes, on phones, voice and SMS service) and essentially eliminate the notion of a family plan for voice calls. That means those who don't talk or text much will pay more for those services, while the chatty Cathys and pinging Pauls will pay less. But there's also less nickeling and diming on services such as minute buckets and messaging.
It's clear that we should all prepare to pay more to access data services, both as carriers milk our increasing dependence on it and as Apple, Google, and Microsoft enhance their mobile OSes and services to encourage us to do even more on the go. The more data we use, the more it should cost. But it's not fair to charge us more, or even the same, for services we use less, such as voice calls.
But Verizon seems to be trying to balance various usage scenarios and avoid obvious opportunities for price gouging. For example, tablets can be added and deleted each month; unlike phones, they won't require an ongoing commitment and, thus, fee. Verizon spokeswoman Brenda Raney says there's an easier approach that avoids even the $10 tablet fee when you use it: The Share Everything plan includes hotspot service from any device that supports it. As it's no longer an additional charge, you can simply connect tablets via Wi-Fi to a hotspot-enabled smartphone or tablet, if you have one in the plan.
You get alerts before you exceed your plan and can change the data allotment without extending your contract. You can buy additional 2GB increments for $10 before you go over your cap; otherwise, Verizon charges $15 per additional gigabyte. All of that is nicely flexible and handled fairly.