Verizon joins the unlimited wireless data party – USA Today (Feb 13, 2017)
The challenge for the two largest US wireless carriers has been to strike an appropriate balance between responding to the price-based competition from the smaller carriers and preserving revenue per user and margins in their massive existing bases of customers. On the one hand, failing to respond aggressively enough to competitive moves risked customer losses, and on the other responding too aggressively risked reducing revenue per user and margins for the base. On the whole, AT&T and Verizon have chosen to be more conservative, largely preserving prices while tinkering at the edges with temporary promotions and in AT&T’s case using its prepaid brand Cricket to compete more aggressively on price. But that conservatism has come at a cost – AT&T has seen postpaid phone net losses for two years now, and Verizon’s phone net adds have also dropped considerably below past levels, though their margins are better than ever. This move today by Verizon suggests that it’s finally reached a point where it doesn’t feel it can hold off any longer on unlimited plans and intends to compete more aggressively. That will likely be good for subscriber numbers, but potentially bad for margins as it caps revenue per user upside from a data plan perspective. I’m not yet convinced that AT&T needs to follow suit with broad-based unlimited data plans – I think they’re happy to keep their all you can eat plans limited to DirecTV customers, at least for now.
via USA Today