by Jeff Reeves | June 12, 2012 9:43 am
The age of “phone companies” is officially over.
The wireless arm of Verizon (NYSE:VZ) has long understood the mobile revolution. And as a result, it is dropping nearly all of its voice plans and shifting to data-focused subscriptions that allow multiple devices, including smartphones, laptops and tablets.
It’s a wise move for the nation’s “largest cellphone company” — if you can even call Verizon that anymore — and a change that competitor AT&T (NYSE:T) likely will replicate very soon.
Here are the details on the Verizon changes, which take effect June 28: Pricing schemes focus on data usage and allow consumers to “share” that bandwidth across up to 10 gadgets. Dubbed “Share Everything,” the plans will include unlimited phone calls and texting and start at $90 per month for just one smartphone and 1 gigabyte of data, with additional charges for devices and usage as consumers do more with their electronics.
Verizon is billing the “Share Everything” prices as a boon to consumers who don’t use a lot of data, as they are cheaper than current plans with unlimited calling and texting. However, those of you who still use an old phone primarily for voice will see some sticker shock if you opt into this plan.
A very basic $40-per-month plan will remain in place for these users of “dumb” phones who don’t consume any data. But other than that, it’s the $90 data plan and up.
Obviously, the new pricing system is a huge plus to folks with multiple devices, since the fees for getting separate data plans for every tablet or laptop can really add up.
AT&T already has said that it’s looking at introducing shared-data plans soon. Just a few days ago, it called data-only plans “inevitable,” so while Verizon seems to have beat AT&T to the punch, you can expect its top rival to follow suit.
This is a huge change for the major telecom companies, and closely follows a move in the last year to end unlimited data plans as “super users” of mobile devices were clogging up networks.
So what does this mean for consumers? The good news is folks with a lot of personal electronics are going to get a break — both in the logistics of billing, with a shared account for all their gadgets, and on pricing. For instance, Verizon will stop charging extra to allow you to use your smartphone as a mobile Wi-Fi hotspot.
And just paying for the data instead of footing a fee for access to Verizon networks might finally encourage folks to get their Kindle Fire or iPad hooked up anywhere instead of relying only on Wi-Fi. That ultimately could place much more stress on Verizon’s network, so capacity is key if demand does rise sharply.
But more importantly, this move is a signal that the old era of “phones” as we know it is officially over. These days, mobile devices can do so much more than just allow you to talk to someone, so Verizon is smart to evolve with the electronics industry and focus on data first.
It’s amazing to think that 15 years ago, less than 5% of people in the world had a cell phone — but now, mobile conversations have become all but an afterthought.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace??.com or follow him on Twitter via @JeffReevesIP. As of this writing, Jeff Reeves did not own a position in an of the stocks named here.
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