updated 03:25 pm EST, Tue March 1, 2011
Verizon hints unlimited data ending in summer
Verizon CFO Fran Shammo said on Tuesday that the carrier's unlimited data plans could come to an end in the summer. She mentioned during a that Verizon would "probably do that in the mid-summer time frame" and implied strongly that it would be timed for the expected summer launch of the iPhone 5. There could be some profit margin "lumpiness" in future quarters as Verizon took on the subsidies for a large number of iPhones, Shammo said.
Profits per subscriber would still be high, in the mid-40 percent range.
The executive justified the continuance of unlimited plans in the short term in the same way made before the iPhone 4 launch, casting it as an incentive to get early adopters onboard. Verizon "didn't want to put up a barrier" to early adopters, she said. Getting many of these customers early also meant that many of them were locked into two-year contracts that would make it hard to switch away.
A summer window would likely be meant to help minimize the impact of a genuinely new iPhone on Verizon's network. Although it has tested its network to avoid the network collapse that hit AT&T in 2008 and is still being felt three years later, the CDMA provider is likely keen to discourage the heavier uses of the network. Getting new iPhone 5 buyers on a capped plan in the summer would be one approach and would mirror AT&T's plan strategy from just before the iPhone 4, where it ended unlimited service just as many new customers were signing on.
Verizon hasn't given indications of whether its tiers will change. Tablet buyers can pay $20 for 1GB, but its $35 for 3GB, $50 for 5GB and $80 for 10GB plans would be significant price hikes that would still be a step back in service.