Verizon Next to Cut Unlimited Data Plan?


If you own a Droid phone, enjoy your unlimited data plan while you can. Verizon (Stock Quote: VZ) has hinted that it will be replacing its current data plan with a new pricing model.

In a recent interview with BusinessWeek, Verizon CFO John Killian declared that the company would likely eliminate the unlimited data plan option in the not-too-distant future. “We will probably need to change the design of our pricing where it will not be totally unlimited, flat rate,” he said.

Killian explained that new smartphones will likely lead to “explosions in data traffic” that could be a burden on Verizon’s network if they don’t find a way to regulate it a bit. Killian offered no other information about when this shift might occur or what the price of the new limited data plans would be. At the moment, Verizon offers several smartphones including the popular Motorola Droid.

If Verizon does pursue this new pricing model, it will be following in the footsteps of AT&T (Stock Quote: T), which earlier this month became the first phone company to eliminate the unlimited data plan. AT&T now offers two data plans, a 200-megabyte option for $15 a month and a 2-gigabyte option for $25 a month. AT&T’s unlimited data plan costs $29.99.

When announcing the new data plan, AT&T emphasized that 98% of its customers use less than 2 gigabytes per month, and would therefore actually be paying less for their data plans under this model. Yet, that didn’t stop consumers from expressing frustration that they were essentially being forced out of a good deal.

Assuming Verizon makes this change, they will likely lean on similar statistics, but the deeper problem here is that Verizon now runs the risk of losing some of its popularity. For every mistake AT&T has made with smartphones in the past year – leaking personal information, struggling to provide reliable service – Verizon has come off as the better option, which is why iPhone users constantly pray for Verizon to partner with Apple (Stock Quote: AAPL). However, this switch could transform AT&T from a pariah into a pioneer and make Verizon look like AT&T’s partner in crime.

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