Data is cheaper to transmit, so why is Verizon more expensive?
0. phoneArena 23 Jan 2013, 15:39 posted on
To be fair, this isn't an issue specifically with Verizon, but Verizon does have the easiest numbers to parse right now. According to some research done by The New York Times' Brian X. Chen, the trouble starts with the feature that we had been hoping for since the tablet boom started a couple years ago: shared data plans. Those plans make it so while data is now cheaper for carriers to transmit, carriers like Verizon are also able to charge more for that data...
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27. JohnnyBravo (Posts: 105; Member since: 02 Dec 2012)
seriously how do we get this going??? Carriers have too much power in the states. The charges are outrageous!!!
2. ajac09 (Posts: 1363; Member since: 30 Sep 2009)
All the carriers need to be hit with investigations on there pricing schemes.
3. mike2959 (Posts: 215; Member since: 08 Oct 2011)
My question is why my home Internet from Time Warner is any different? 60.00 a month and I can stream 24/7. At 20GB down. Unlimited. I understand everyone in my subdivision streams all at the same time yes it slows down, just like to many people on the same tower. The other thing is unlike wireless carriers, I have no choice in my home Internet provider, Time Warner could charge me 150.00 a month if they wanted to. What is hard to understand is why the wireless carriers are putting out land line companies with unlimited talking, which was a big deal 10 years ago not so much now, but the wireless companies will not take on home Internet providers? All it would take is either Verizon or At&T to go truly wireless.
25. lsutigers (Posts: 710; Member since: 08 Mar 2009)
Wireline will be the way of the past in the next few years. Sprint spun off it's residential wireline operations years ago leaving Verizon and AT&T as the only 2 carriers left with residential wireline operations, and even they agree, wireless is the future. Verizon Fios and AT&T Uverse has been somewhat of a flop, while it delivers fast data speeds due to fiber, they realized LTE is already here and can deliver that speed wirelessly, without the expensive infrastructure to every home. Verizon has stopped the expansion of Fios citing an expensive rollout for the return on investment. LTE is the wave of the future and Clearwire has already tested 100mbps + networks in the states. It's only a matter of time before AT&T and Verizon get rid or dissolve their wireline operations and move to wireless. Wireline is only beneficial to enterprise and government concerned with security which is why Sprint kept it's enterprise/government wireline operations. Even as global Tier 1 internet carriers like AT&T, Sprint and Verizon realize wireline fiber backbones will always be there, wireless is the future delivery mechanism to consumers.
34. Zero0 (Posts: 583; Member since: 05 Jul 2012)
One strand of optical fiber has a larger bandwidth than all of wireless radio. It's also serving a smaller population (one household). Mobile networks will be flooded if everyone uses them, at least for the foreseeable future.
4. mike2959 (Posts: 215; Member since: 08 Oct 2011)
I meant truly unlimited. Then the rest would follow.
38. rallyguy (Posts: 533; Member since: 13 Mar 2012)
Sprint has unlimited. Yes their service is not up to speed with Verizon. But that's why you pay the premium price for Verizon. Every company changes if the customer demands it. Right now, people are paying it so why change? If they started loosing millions of customers to Sprint I'm sure they would consider changing their business strategy to mirror Sprint.
Remember when we had "home calling areas" for mobile phones? Once one major competitor dropped it, they all had to.
5. glenwf (Posts: 11; Member since: 14 Jun 2012)
It's called a free market system. if you don't like the pricing, contract length, etc.... then go to another carrier or go prepaid. If you want the best, most reliable then go with the carrier in your area that offers the best and STFU
Also, for the writer of this piece who claims share plans are more expensive here's some basic math:
VZW 1 year ago: 700 min + unlim text + 2 smartphones, 2GB each = $159.99
VZW today: unlim minutes, unlim text, 4 GB shared data = $150
this math is almost identical for AT&T
6. HDShatter (Posts: 1021; Member since: 17 Jan 2013)
Tmobile prepaid $70 - unlimited everything no data throttle, with 4g data and soon lte.
tmobile $30 - 100 min of talk, unlimited texting, unlimited 3g data + 5gb of 4g data,
59. metalpoet (unregistered)
tmobile also sucks in about half the country, I wouldnt hesitate to go to them if they had faster than 2g speeds in my state!
7. Whateverman (Posts: 3189; Member since: 17 May 2009)
The problem with the math you provided is, it's a "One sizes fits all" kind of solution that they are throwing out there with no alternative.
Take my account for example...
2 Smartphones w/ $30 unlimited data (Average about 3GBs - 4+GBs per month)
2 feature phones w/ data blocked
2 $5 texting plans
total bill before taxes $180 / $225 after.
Now, no matter how you slice it, buying a phone out right to save my unlimited or going to shared data plan, my only option is to give VZW more money. That's why this article needed to be written. Thank you Michael!
39. rallyguy (Posts: 533; Member since: 13 Mar 2012)
"my only option is to give VZW more money"
Why not switch to a different carrier? Why should they change if you are going to keep feeding them your money?
47. Whateverman (Posts: 3189; Member since: 17 May 2009)
Because I'm under contract for a few more months and I don't want to pay the ETF either.
60. metalpoet (unregistered)
because if verizon is the only consistant carrier in your area, than youll do whatever they want and pay whatever rate that want to charge even if my cellphone bill is more than my car payment or rent!
53. jherz6 (Posts: 215; Member since: 23 May 2008)
Theres always a way around having to pay outright for a new device to save your unlimited data. Add a line of service for ten bucks using a simple phone which requires no data and use it to upgrade your line of service. You will not loose your unlimited data. Whats a extra ten thats lunch once a week.
54. Whateverman (Posts: 3189; Member since: 17 May 2009)
Yeah, I thought about doing that, but I'm still not sure. There is still the matter of my wife's upgrade too.
63. forgingsteel (Posts: 13; Member since: 11 Apr 2012)
Can you expand on this? Use what to upgrade your line of service?
8. akhi216 (Posts: 61; Member since: 01 May 2011)
You're missing the point which is that is they're charging 50 GB for LTE data that it's cheaper for them to provide and they're forcing people to pay for unlimted talk and text regardless of whether they need it or not.
Verizon has plans to offer LTE TV service in the future while they charge an arm and leg for service, they will presumably charge a fee for using the LTE TV service in addition to raping people with data charges...good luck with that.
9. MichaelHeller (Posts: 2662; Member since: 26 May 2011)
There are huge areas of the USA where the only choices for wireless service are Verizon and AT&T. That's not a free market, that's a duopoly.
13. androiddownsouth (Posts: 598; Member since: 02 May 2012)
Michael, should Verizon and AT&T be penalized for being the only carriers willing to operate in those areas? By what you said, if it weren't for them, there would be no coverage at all there. Other companies have the opportunity to place towers in those areas. The fact that they obviously choose not to is not the fault of VZW or AT&T.
18. belovedson (Posts: 832; Member since: 30 Nov 2010)
are you blaming the people for companies building towers in order to make profit off of them? wtf
19. androiddownsouth (Posts: 598; Member since: 02 May 2012)
All I'm saying is the duopoly in certain areas is not due to anything negative on the part of VZW or AT&T. Other carriers have the same opportunity to provide service to these areas, but choose not to. It actually is the free market in action due to the fact that they chose to put towers in those areas and no other company did. At least they are willing to provide services to people living there.
28. JohnnyBravo (Posts: 105; Member since: 02 Dec 2012)
maybe they dont have the resources to place towers there. Point is ATT and Verizon are TOO strong. Dan Hesse has even said there is a HUGE gap between Att/Verizon and Sprint, who is the third largest carrier in the states. Its like comparing Saturn to Pluto. Hell T-Mo is even pondering leaving the states as one of their execs said that there isnt any room for a 4th carrier.
I love Verizon's coverage but their pricing sucks!!! I understand that you pay for what you get but it shouldnt be this high.
33. androiddownsouth (Posts: 598; Member since: 02 May 2012)
That is like penalizing someone for being TOO successful. I too wish the pricing were lower, but the company obviously reinvests more money into it's infrastructure than anyone else, thus providing service in more places more reliably than other carriers. Being more reliable is what Verizon is known for, and for good reason.
I don't have an answer for the pricing issue, and I'm not necessarily defending it. I'm just saying Verizon is the largest carrier for a reason, and since it isn't low prices it must be the quality of the network.
61. metalpoet (unregistered)
sometimes the successful need to be taken down a peg or two or TWELVE! maybe all i want is My Galaxy S3 to have 4G LTE 4GB/ month, 200 minutes, and unlimited texting and not have to pay $1110 for that one line!
49. corporateJP (Posts: 1548; Member since: 28 Nov 2009)
The goverment allowed this, not the people. Verizon is the only real choice where I live. Nobody wanted them to buy Alltel and AT&T screwed us with the leftovers. We had no choice. Not everybody lives in the "big city". The government still has archaic laws written in the days of analog cellular that were never rewritten because of lazy buracracy or lobby might. We can't have more towers. Do some research.
You come off as a carrier fanboy.
17. belovedson (Posts: 832; Member since: 30 Nov 2010)
finally some legit journalism. feed the people info like this and back it up with numbers.
also you might want to look up how obama's administration doesn't seem to f'en mind that tech companies profit margin is higher than the crap big oil pulled on us
20. Gawain (Posts: 349; Member since: 15 Apr 2010)
Not true, where T-Mo or Sprint are not available there are dozens of regional carriers. Using the back-woods to justify the argument doesn't work because those local/regional carriers are fiercly competitive, Cincinnati Bell and Bluegrass Cellular are two prime examples.
Also, you did not offer any insight to the fact that the carriers paid billions just to have the right to build out the network. Verizon paid somewhere north of $10B for C-Block, that was before a single LTE panel was even lit up. Don't be so quick to discount the cost of building the network either, besides the infrastructure, the people involved are the single most expensive element in the whole equation.
50. corporateJP (Posts: 1548; Member since: 28 Nov 2009)
That "regional carrier" excuse is worse than calling the "rural" reasoning an "excuse".
We don't have any regional carriers where I'm at anymore, they were all bought by Verizon and AT&T. AT&T barely works, so by default T-Mobile works even worse. You get kicked off of Sprint for excessive roaming after a few months.
Cincinatti Bell and Bluegrass are poor examples.
You need to get out of Eastern Ohio and Western Kentucky and see the rest of the country for what it is, my friend.
62. metalpoet (unregistered)
gawain. come to Washington County, Utah. 200,000 People here and there is no "local" carrier! The only consistant service here is Verizon with NO dead zones, next is Sprint with half the area a dead zone, after that is AT&T with 35% coverage and T-mobile with 100% 2G/EDGE speeds.
40. rallyguy (Posts: 533; Member since: 13 Mar 2012)
You can also go pre-paid. While in the end those might be your two cheapest options, that is one of the things you have to acccept living in a rural area. The profit margin isn't there for them to invest millions of dollars and only get thousands in return.
10. goulav (Posts: 5; Member since: 03 Jan 2012)
The problem is; every carrier copies each other. If you want to do math - check and see which of the major carriers charge the least for sending a text message with no text package.... Plus, at&t and verizon hold over 80% of the customers. Also, why don't they offer a low minute, low text and high data plan?
41. rallyguy (Posts: 533; Member since: 13 Mar 2012)
I'm on a Sprint SERO premium plan.
$50 a month
500 anytime minutes
free nights and weekends
unlimited mobile to mobile
It used to be $30 a month for the same thing without being able to get a modern phone. It was available to anyone who wanted it years ago. I sent the offer/plan to all of my friends, not one of them signed up for it. Now they bitch how much Verizon costs.
16. belovedson (Posts: 832; Member since: 30 Nov 2010)
thats not much of a free market when your plan is limited to a specific user.
most people who stream consumes more than 10gb's a month. whether its sitting in front of the tube or through mobile means.
people in the us need to smarten up and promote articles like this one. our country is leaking money out the sides and these companies att and verizon are allowed to abuse the avg consumer because they probably and most likely pay off the right people to continue to do so
23. Joshing4fun (Posts: 1047; Member since: 13 Aug 2010)
Free market=the right to screw us over.
30. kevv2288 (Posts: 20; Member since: 22 Mar 2012)
My plan one year ago 1 smartphone with 450 mins unlimited nights and weekends unlimited texts and 4gb data( double the data offer so would normally be 2gb) - $89.99
New plans 1 smartphone unlimited talk and text (your only option is unlimited talk and text even if u used most your minutes at night or to other vzw phones you don't have a choice ) and 2gb data is $100 a month and with 4gb is $110 a month so yeah definitely more expensive for me on the new plans if I switch
45. troutsy (Posts: 252; Member since: 17 Feb 2012)
I guess basic math isn't enough to answer this problem, gotta graduate to the college level stuff. I think it's more likely that the majority of the users on this forum have unlimited data/corporate discounts than those that walk into the store and get a capped data plan with no discounts.
VZW unlimited plan (700 min, 500 text (unlim to VZW), 2 smartphones unlimited data) = $149.96
With a corporate discount (8% on plan, 12% for features) = $141.56
VZW shared plan (unlim min, unlim text, 4GB data, 2 smartphones) = $150
with a corporate discount (8% on plan, 12% for features) = $144.40
DOOOOOD, unlimited data gets dropped and the cost goes up? PASS
46. deviantirish79 (Posts: 23; Member since: 23 Jan 2012)
That is the same reason here. If i switched my plan to the Share everything plan, my bill would go up almost $30 because of 4 smartphones and 1 feature phone.
I will stick to the unlimited plans I have and buy phones outright.
I refuse to pay more for less!
48. corporateJP (Posts: 1548; Member since: 28 Nov 2009)
Koolaid. It costs some people ALOT more to be on a Share Everything plan than the previous pricing system.
11. Sparhawk (Posts: 75; Member since: 10 Mar 2012)
"easiest numbers to parse right now" = reporter unwilling to spend the time to look up the competitive numbers.
"trouble starts with the feature that we had been hoping for since the tablet boom started a couple years ago" = we brought this on ourselves. Verizon was only providing what the market requested.
12. Truth (Posts: 56; Member since: 15 Jul 2009)
@michaelheller granted there are huge geographic areas of the USA where there are only two choices, but very few people live there. Hey there are only two carriers in Alaska serving 2 people that is unfair. Lets change because Alaska is bigger than Rhode Island but Rhode island has more people. Ohwell. That doesn't make sense.
14. InspectorGadget80 (Posts: 6251; Member since: 26 Mar 2011)
Its because their greedy with their over price plan
15. belovedson (Posts: 832; Member since: 30 Nov 2010)
its increasingly annoying how american consumers give in to the exploits of credit and telecommunication companies like verizon and at&t. i mean they have been in trouble before (at&t) of monopolizing and ripping off consumers. i sometimes wonder if its ok for people to get ripped off.
the next evolution of communication is video. video requires bandwidth. in the meantime verizon and at&t duped many people into giving up there unlimited data plans and they continue to lie.
never give up unlimited plans, they cant simply breach a contract your paying for unless you sign a new contract. i would consider it avg data use if the american consumer to be around 12gbs a month for multimedia users (netflix, streaming audio, Youtube).
how the avg is 1-2gb a month is beyond me.
22. androiddownsouth (Posts: 598; Member since: 02 May 2012)
It is because the average user uses their phone for calls, text, email, pictures, and social networking. Not as many as you think stream videos over their wireless data connection. Also, many people use Wifi as well. I see many people with smartphones that use less than 1 GB a month.
51. corporateJP (Posts: 1548; Member since: 28 Nov 2009)
You clearly work for Verizon in some capacity, because your answers are always verbatim from their playbook.
21. Joshing4fun (Posts: 1047; Member since: 13 Aug 2010)
Are we supposed to be surprised that Verizon screwed us over more? This is how they've already operated; squeezing money out of customers while making it seem like a good deal.
24. nyamo (Posts: 274; Member since: 19 Mar 2011)
michael is right, i would love to go to t-mo but service in iowa is terrible. outside the metro is like non existent. not to mention when my wife had service with them she rarely had service. just because there are multiple options doesn't mean all are viable. and in no way am i going back to a cdma carrier, and i do know that limits my options greatly
29. papss (unregistered)
My thoughts are that you can pay a small amount (tmob) and get slightly inferior service or you can pay more and get better service (VZN and AT&T). These companies don't owe us anything.. It's like going to a nice restaurant and complaining about the bill or going to a Audi dealer and want Toyota prices for the superior products. Seriously you don't have to use their service, hell you don't have to own a cell phone.. The problem I see is entitlement..
31. JohnnyBravo (Posts: 105; Member since: 02 Dec 2012)
PHONEARENA: I DEMAND YOU GIVE MICHAEL H. A RAISE FOR BRINGING THIS SUBJECT TO LIGHT. Good Job Michael.
I cant think of any other service that sticks it to their customers this bad...maybe Comcast with their cable service.
35. Whateverman (Posts: 3189; Member since: 17 May 2009)
I agree. Where I live, Comcast is the only cable provider in town. They were charging us $170 for tv and Internet, and a DVR, no phone, no movie channels. I just bought a Roku box, added Hulu plus and Netflix, cut the big by 100 bucks.
I want to do the same with my cell phone service but it isn't looking good at all. The only way to cut my bill at this point is to go to a feature phone, and I'm seriously considering doing that.
32. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
What? someone is missing form the comments here.....I expected his to be first...lol.
Depending on some things...I woulda saved money by going to the shared data plans. I have a 3 line family plan....1 line unlimited, 1 with 10GB and one with 2GB I think...
And depending on some things....Verizon is a few dollars cheaper than AT&T.
36. speckledapple (Posts: 878; Member since: 29 Sep 2011)
I understand what you mean and its true but there is something else you failed to mention, choice. At least in the US there is a significantly limited amount of choice in getting the best, everywhere, for the right price. The problem is that through whatever means carriers in the US have gotten large amounts of leeway by the government. They are allowed to charge damn near anything, change their plans for more revenue without regulation, and lastly restrict what we download under the blanket of network optimization. Its a major problem.
What can we do about it? Well writing ones congressman does nothing but we choose with our pocketbook as well. I must say as Verizon user, I know what they charge and how it just creeps up. I think we pay way too much. But then again, we have allowed our choices to become very limited havent we.
37. cripton805 (Posts: 913; Member since: 18 Mar 2012)
Actually the government is restrictive and Verizon and Att do everything in their power not to allow anyone else to build their companies large enough to compete.
Sprint has been attempting to build, but their limited to the FCC and regulations. Verizon and Att call the shots. They buy what they need if they see a threat.
43. rallyguy (Posts: 533; Member since: 13 Mar 2012)
Charge what they want and change their plans for more revenue without regulation? That's a good thing because the government only screws things up. You think the government really works for the people? You don't want the government running things.
I would disagree, the companies are regulated in many ways. The biggest if by the consumer. You think they can charge $500 a month? They can, but who would sign up for it? They charge for a service what they believe people will pay. Do they want to make money? If people were not signing up for the data shared plan they would drop it. So educating people is the best way to make change, not bitching at a company.
So many people talk about the evil companies making a profit. But if you work for that company where do you think your raise comes from? How are they able to offer benefits? Also let's not forget that many many people are benefiting from these companies making profits.
Those of you that have a 401K, retirement account, or investment account. How do you think the money in your account keeps going up? A business looks profitable for some reason. Your account manager uses your money to buy stock in the company. The company makes a profit, the price of the stock goes up, then your account manager sells it and makes money, which means you make money.
The company itself like Verizon for example. Why does it invest billions of dollars in new technology? To provide a better service which they believe people will pay more money for. The prices may be high, but when you signed the contract you believed the service you were going to receive was worth the monthly price.
52. cripton805 (Posts: 913; Member since: 18 Mar 2012)
When I had signed up for VZW three years prior, they changed everything and screwed their loyal customers by limiting their data, taking off 1 year upgrades to main line, removing upgrades all together IF you wanted to keep unlimited, crappy customer service, and bullsh** plans.
Obviously I cancelled.
Now $90 unlimited talk & text, 1gb of data
$90 400 Mins, unlimited text & data.
The previous plan was MUCH better for data users, but it's whatever benefits Verizon. It really doesnt matter if they offer unlimited everything for $90. They can still make major money, but they choose to be stingy and it will come back to haunt them.
57. Larry_ThaGr81 (Posts: 294; Member since: 26 May 2011)
This is why I won't give up my unlimited data nor change the core of my plan because they seem to get worse as time passes.
44. ronjr123 (Posts: 60; Member since: 16 Feb 2012)
I think one of the main reasons our pricing is so much more than other parts of the world has to do with the subsidizing of phones. Of course, we American consumers are used to the two-three hundred dollar pricing for a premium device. Do not think for one minute that that is all you are paying for it, the rest is rolled into your monthly bill. Over the length of a two year contract you are paying a lot more than the retail price for the phone.
At this point how do we fix this? Idk.