Verizon Claims Nobody Wants Unlimited Data, Wouldn't Be Profitable Anyway

from the not-the-droids-you're-looking-for dept

Tue, Sep 27th 2016 6:22am — Karl Bode

Back in 2011, Verizon and AT&T eliminated unlimited wireless data plans, instead pushing users toward share data allotments and overage fees as high as $15 per gigabyte. And while the companies did "grandfather" many of these unlimited users at the time, both companies have made at art form out of harassing or otherwise annoying these customers until they convert to costlier shared plans. And despite the fact that such overage-fee-based plans confuse the living hell out of most customers (who have no idea what a gigabyte is), both companies continue to insist that customers don't actually want unlimited data.

Speaking at an investor conference last week, Verizon CFO Fram Shammo once again declared that Verizon knows what consumers want, and it isn't unlimited data:

"At the end of the day, people don't need unlimited plans," Verizon Chief Financial Officer Fran Shammo said at an investor conference Thursday."

And despite the fact that plenty of companies (like T-Mobile) have seen explosive growth of late selling unlimited data plans, Shammo proclaimed making money off of unlimited just isn't possible:

"T-Mobile and Sprint have introduced cheaper unlimited data plans -- in exchange for slowing the connection for lower-resolution video -- and AT&T has been trumpeting its own unlimited data bundle with DirecTV video service. The push to unlimited data marks a reversal of the last few years of rhetoric about the costs of delivering service. For Verizon, that remains the biggest argument against unlimited. "You cannot make money on an unlimited video world," he said

Of course what Shammo means is that Verizon won't see the same generous profit margins it's currently seeing if it were to actually give consumers what they want. Verizon saw $8.0 billion in profit on $21.7 billion in second-quarter revenues in large part thanks to shared data plans (though Verizon Wireless' earnings were perfectly healthy under unlimited data plans as well). Since most users don't know what a gigabyte even is, they tend to sign up for bigger plans than they actually need for fear of hitting the overage wall.

Those fears pay huge dividends for the mobile carrier, whose wireless plans are constructed like a giant funnel that constantly pushes users to more and more expensive levels of service once in the door.

Verizon for years has justified some of the highest rates in the industry as reflective of the overall quality of its wireless network. But as competitors like T-Mobile begin to catch up, Verizon's running out of marketing ideas to justify its service's higher price point. Enter last week, when Verizon responded to new unlimited data promotions from Sprint and T-Mobile with new ads proclaiming that the company doesn't sell unlimited data, it sells "limitless data." When asked how you can call a gigabyte-capped shared data plan limitless, Verizon PR trots out its very finest dancing shoes:

"Limitless refers to how you can use your data and unlimited refers to the amount of data,” said Kelly Crummey, director of corporate communications at Verizon...Our competitors claim they offer ‘unlimited plans’ but if you really look at them, they are full of limits on how you use your data with thinks (sic) like SD (not HD) and automatically slowing down your speeds. The way our plans are structured, you can use your data however you want – there are no limits.

Well, no limits except the very clear limits. Apparently, Verizon thinks that you compete by telling customers what they want while abusing the hell out of the dictionary. It should be interesting to see how that tactic plays out as T-Mobile continues to erode Verizon's wireless market share.

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Filed Under: caps, fran shammo, unlimited data, wireless
Companies: verizon

28 Comments

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Anonymous Coward, 27 Sep 2016 @ 6:30am

At the end of the day, most people do not need data plans.
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Anonymous Coward, 27 Sep 2016 @ 6:31am

My grandfathered unlimited plan is the only reason Verizon still has me as a customer. If not for that, I would drop them immediately.
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Anonymous Coward, 27 Sep 2016 @ 6:34am

It's not lying, it's marketing!
Verizon: "Hey, look, we can lie just as well as they can!"
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Anonymous Coward, 27 Sep 2016 @ 6:37am

Thank you Verizon for giving me limitless data. I can now do whatever I want with my data. Before I had limits on what I could do with my data that even I didn't know about, but Verizon has set us all free!
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Anonymous Coward, 27 Sep 2016 @ 6:40am

Translation
"We'd like to steal more money from our victims!"
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Anonymous Coward, 27 Sep 2016 @ 6:43am

Re:
or, really, for that matter, cell phones. Let's go back to the wall phone or a Trimline next to the bed on POTS (where still available).
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DannyB (profile), 27 Sep 2016 @ 6:52am

They don't need what we don't offer
I remember reading about this in The Dragon Book decades ago.

Why didn't an early FORTRAN compiler offer arrays with more than 3 dimensions? Because very few programs need arrays with 4 or more dimensions. But if your compiler doesn't support 4-dimensional arrays (or more), then of course, you're not going to see any programs in your language that use that feature.
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Anonymous Coward, 27 Sep 2016 @ 7:01am

Low data caps can/are affecting innovation
The low data caps we have today is going to affect innovation if it isn't already. I had an unlimited plan and though I didn't use a lot of data, I never thought twice about it. Now that I am on a limited plan, it is always in the back of my mind when I have to use data for navigation or other tasks. I can tether my company laptop and VPN into the network and work remotely. But now I am unsure if that is going to cost me money.

If we want true innovation, we need to take the chains off and let the data flow and see what people come up with. Instead, we have 4 companies effectively throttling the entire user base.
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I.T. Guy, 27 Sep 2016 @ 7:04am

Re: Re:
"a Trimline next to the bed"

Hey. Hey!!! I still have a Trimline next to the bed, and a wall phone in the kitchen.

It's right next to my Facsimile and Teletype machines.
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Ninja (profile), 27 Sep 2016 @ 7:16am

Verizon has not dropped the "unlimited" yet
They still offer unlimited lies and contempt for the customers.
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Ninja (profile), 27 Sep 2016 @ 7:39am

Re: Low data caps can/are affecting innovation
Nah. You get your car and emit a lot of dioxide while commuting needlessly to your work because it costs $15 per Gb to work home but only a few bucks if you drive there. Good for the environment, good for the customer's well being and good for our pockets!
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That Anonymous Coward (profile), 27 Sep 2016 @ 7:52am

I await the first lawyer who cooks up a nice class action lawsuit targeting advertisers. They are unwanted intrusions that are costing consumers money as the providers look for ways to extract even more money.

Pity the poor provider using DPI to stuff their own advertising into the pipe, if they don't charge consumers for that advertising data useage there will be more lawsuits.

The amount of data consumers is using has been growing, but its growth is being artificially held back by providers who feel compelled to keep raising profits while offering as little as possible. Eventually one of the major networks will collapse because all of the deferred maintenance and expansion needed to support the demand will catch up with them. And we all know the money to fix it won't come from the CEO's paycheck they will come begging for us to save them from the results of their greed, and hope we'll forget how they did it to themselves when it happens again.
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SteveMB (profile), 27 Sep 2016 @ 7:52am

Verizon CFO Fram Shammo

Fellow senior executives Scammo, Conno, and Fakeeo had other commitments.
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Anonymous Coward, 27 Sep 2016 @ 7:57am

Re:
Get ready, cause they are coming after you next.
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Anonymous Coward, 27 Sep 2016 @ 8:02am

my unlimited plan was great till they fucked over foxfi
here's to hoping they it fixed fast
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Anonymous Coward, 27 Sep 2016 @ 8:04am

Yea cause on one ever goes over their fixed hardwired cable internet plans downloading games for xbox and ps4
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Anonymous Coward, 27 Sep 2016 @ 8:26am

Re: Re:
They've already tried at least half a dozen times. I've resisted so far. We shall see what the future holds.
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SirWired (profile), 27 Sep 2016 @ 8:28am

Seems like a reasonable answer to me
Using "Consumers don't want unlimited plans" as shorthand for: "We can't charge what we'd like (and meet our Return on Investment goals) for unlimited plans" seems to be a perfectly valid and normal answer for me. It's a business decision VzW has chosen to make.

Because I love car analogies: I may want a fast car, but I am rather unlikely to buy a car from a company that gratuitously puts a 600HP V12 in every vehicle; I'll shop elsewhere, because I expect their prices will be too high.

(But yeah: "'Limitless' means we'll let you spend your data on whatever you like" is pretty stupid.)
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Anonymous Coward, 27 Sep 2016 @ 9:54am

Does Verizon zero rate the ads ?
If not, is that theft of service?
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Padpaw (profile), 27 Sep 2016 @ 10:36am

We all know consumers want to be price gouged for poorly delivered services and cheated every chance they can.
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Michael, 27 Sep 2016 @ 11:02am

Re:
It would be interesting to find out if the advertising ID that they add to the browser session is included in the bytes they count for their meter.

Is it legal to charge someone for potato salad by the pound but weigh and sell it only in containers that weigh 4 pounds empty?
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Padpaw (profile), 27 Sep 2016 @ 11:22am

Re: Low data caps can/are affecting innovation
for massive profits they can use in exchange for bribing those in charge of regulation with a pittance compared to what they make
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Anonymous Coward, 27 Sep 2016 @ 11:26am

Re:
they sound exactly like that guy that said no one would ever need more than a few MB of RAM
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Alina Dolinschi, 27 Sep 2016 @ 12:50pm

You know nothing Verizon
I cannot imagine nothat having an unlimited data plan.. I love t-mobile. Verizon sucks because they don't know their customers afterall...
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Anonymous Coward, 27 Sep 2016 @ 2:26pm

Also the fact that verizon staff can see in real-time peoples internet usage. And they DO use it, for shits n giggles in the customer service departments.

Got an annoying customer? lets mute the call and laugh about the horseporn he searched for last night.....
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nasch (profile), 28 Sep 2016 @ 1:30pm

Google Fi
If this describes you:

- don't need unlimited data
- use very little data or have widely varying data usage
- get good coverage from T-Mobile, Sprint, or US Cellular
- like Android

check out Google Fi. $30 / month plus $10/GB. No contract, free phone financing.
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Anonymous Coward, 23 Oct 2016 @ 1:02am

Re:
And how
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Maria Chavez, 15 Oct 2017 @ 11:22am

Phone service
We had to get a land line because on Verizon there is very bad service or no service
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