Verizon Tries To 'Debunk' News Reports Pointing Out Its New Wireless Plans Stink
from the tomato,-tomahto dept
Last week, we noted how Verizon had unveiled some new wireless data plans intended to be a competitive response to T-Mobile. In very Verizon-esque fashion, the new plans involved first and foremost raising already-industry high data prices another 17%, then scolding media outlets that called it a rate hike. The new plans also involved taking a number of ideas T-Mobile and other carriers had implemented years ago, then somehow making them worse.For example, Verizon belatedly introduced a "Carryover" rollover data option. Under most implementations of this idea (as with T-Mobile), you're allowed to take any unused data at the end of the month and store it in the bank for future use. But under Verizon's implementation, this data only lasts one month -- and you have to burn through your existing allotment of data before it can even be used. This is Verizon's attempt to give the illusion of offering an innovative and competing service, but saddling it with caveats to make it incredibly less useful.
Not happy when the media quite correctly pointed out that its new data plans weren't much to write home about, Verizon issued a second, amusing press release clarifying the "myth v. reality" of what Verizon's offering versus what the media reported. As its opening salvo, Verizon repeats its claim that a 17% rate hike isn't a rate hike if you squint and look at the numbers in just the right way:
Myth: Verizon is raising prices with its new plans.This is, of course, not unlike the cable industry trying to claim you're not really paying too much for cable because you're now getting more amazing value per channel. In reality, usage caps are already arbitrary constructs with no ties to real-world costs, and Verizon's entire plan structure is carefully built to drive as many customers to the most expensive data plans. Plans they may not need, but sign up for simply because they have no idea what a megabyte even is, and want to avoid any risk of absurd $15 per gigabyte overage fees.
Reality: The price per GB is lower, across the board. The price went from $30 to $17.50 per GB on the S size plan and from $5.56 to $4.58 on XXL.
More amusing perhaps is Verizon's attempt to claim that the Carryover data plan outlined above isn't just copying a relatively good idea and making it worse (and charging more), it's Verizon's incredible delivery of "the entire package" and an "incredible value":
Myth: Verizon is copying the competition with introducing Carryover and Safety Mode; Verizon’s competitors offer the same type of plans, but for less money.Verizon's modus operandi in response to heightened competition from T-Mobile has been to pretend that the company's network is just so good, it doesn't have to compete on price. In fact, as T-Mobile has applied more and more pressure, Verizon has gone so far as to claim that "price sensitive" customers don't matter. But that's not how real competition works. You don't get to magically choose when you have to compete on price, though with a generation of being a government-pampered duopoly under its belt, Verizon executives clearly believe otherwise.
Reality: No other wireless company can offer the entire package. We bring together options customers tell us they want, in a new plan with incredible value - and a new My Verizon app that puts you in control - all on the best network.
Verizon's tactic of charging "premium pricing for a premium service" worked for a while, but as T-Mobile's network improves and the company has started hoovering up the sector's valuable postpaid subscribers, Verizon's been forced to take more serious notice. So far Verizon's response has been to try and pantomime competition, assuming that consumers and the media are too stupid to notice the difference. Verizon slowly but surely learning that you don't get to head fake real competitive pressure should prove interesting to watch.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: competition, mobile, prices
Companies: verizon
Reader Comments
Subscribe: RSS
View by: Time | Thread
Service with a smile
Me: "I want a bigger bill every month. Can you do that for me?"
VZ: "Sure!"
Me: "I'd like my rollovers to be totally useless, too."
VZ: "Can do! After all, the customer is always right..."
[ link to this | view in chronology ]
Re: Service with a smile
[ link to this | view in chronology ]
Actual Reality: Comcast has a 1TB cap for $70... or $0.07 a GB.... or if you consider their 300GB cap... that would be $0.23...
A 20-60x premium on data for the same backhaul infrastructure seems a little bit like fleecing any way you look at it... though slighty better than the $0.10 for 3kb they used to charge for a text message...
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Reality: Verizon knows its customers are a bunch of sheep who aren't going anywhere no matter how poorly we treat you.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
This is...
[ link to this | view in chronology ]
Don't let yourself be screwed by other companies!
[ link to this | view in chronology ]
The only reason I'm still with them right now is because I have a grandfathered unlimited plan which I plan to hold on to until I die.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
hope that clarifies things ;-)
[ link to this | view in chronology ]
Re:
It's called a 3GB T-Mobile plan with Music Freedom and Binge On. Good luck going over when nothing counts. I haven't come close.
$30 a month.
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Could you take this sentence out behind the barn and strangle it? Or disassemble it and make two or three other correctly formed sentences?
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
For verizon that is.
[ link to this | view in chronology ]
A) dropped calls
B) s m ch p ck t l ss c nv rs t n w s n nt ll g bl
C) dropped ca...
[ link to this | view in chronology ]
"Verizon has made great strides in improving the value it serves to its customers... from a certain point of view."
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Can we get a more measured analysis please?
Can we at least acknowledge that the price per GB is being lowered? One of our main complaints is that they overcharge per GB, so they should at least get some credit for reducing that number. Otherwise we just seem biased.
Instead, I would focus on two things. First that the price of entry has increased. Second that Verizon doesn't value every GB equally.
They need to called out on the fact they they are trying to make Internet access a premium product. Between higher costs for entry level plans and zero-rating of their own content they are expressing that access to independent, unfiltered information is not for the poor. I don't like that message one bit.
The second point is what strikes me the most. Verizon apparently values it's precious bandwith less if you're willing to write a bigger check. Why are we not calling them out for this? It undermines essentially every argument they make defending their pricing. Lower-tier plans which are more likely to get overage charges are more expensive per GB. Higher-tier plans which you might expect to be used more are less expensive per GB. It's completely backwards and suggests a cynical focus on forcing the customer to trade off overage charge fees vs unused pre-paid data.
A deeper dive into why we are so critical would be better than just harping on the fact that the new number is bigger than the old number.
[ link to this | view in chronology ]
Re: Can we get a more measured analysis please?
No, because Verizon doesn't charge per GB. If you don't use all that data allowance then your cost has increased for no benefit.
While we are on the subject of benefits, T-Mobile has pulled an interesting one on me. My plan allows for rollover of data, except that temporarily, T-Mobile generously increased my data allowance to unlimited (real unlimited, not unlimited if you want slow data). However, now, instead of accruing rollover data, it accrues nothing.
So the benefit to me of the "unlimited data" is that I don't accrue any rollover.
[ link to this | view in chronology ]
Re: Re: Can we get a more measured analysis please?
[ link to this | view in chronology ]
Re: Can we get a more measured analysis please?
[ link to this | view in chronology ]
A better measure of price per Gigabyte
I'm using Google's Project Fi and I pay $10 per GB of cell data and if I use less than any multiple of a GB I get reimbursed for the unused cell data on my next bill at $0.01 per Mega Byte. There are cheaper plans than Fi if more than 2.5 GB use per month through other MVNOs, but for low cell data users, Project Fi might be a good choice.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
THIS is strapping your prices to a DragonX rocket and blasting it towards the moon!
[ link to this | view in chronology ]
Just a consideration here, but this statement is pretty much wrong. If that were true, then Mercedes Benz and Rolls Royce would be having some serious problems existing. Not to mention Gucci, Kitcho in Japan, even Apple fell into this category.
The reality is that if your product is better than everyone else's (or at least perceived to be), then you don't need to compete on price. Rolls Royce is just so good that they don't need to compete with Honda's price. Gucci is just so good that they don't need to compete with Forever21 prices. Apple used to be just so good that they didn't need to compete with Samsung's prices. Kitcho is just so good that they don't need to compete with any price at all.
You can (very easily) argue that Verizon's network isn't better than everyone else's and therefore they should have to compete on price. I would agree with that. But the argument "my product is just so good that I don't need to compete on price" is perfectly valid.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Poor Paul
Nonono, he did it because Verizon cost so much he was actually losing money being both a customer and spokesperson at the same time.
Actually makes a lot of sense.
[ link to this | view in chronology ]
I agree
[ link to this | view in chronology ]
T-Mobile
[ link to this | view in chronology ]
Verizon Carryover Data
[ link to this | view in chronology ]
?
[ link to this | view in chronology ]
Waiting for the right opportunity
[ link to this | view in chronology ]
[ link to this | view in chronology ]