Verizon's Shammo says that offering unlimited 4G LTE data is not a sustainable business plan

Verizon's Shammo says that offering unlimited 4G LTE data is not a sustainable business plan
Hey Verizon customers, feeling a little left out? Last week both T-Mobile and Sprint announced unlimited everything packages. T-Mobile One offers unlimited talk, text and 4G LTE for $70 a month for the first line, $50 for the next line, and $20 a line for as many as six additional users. There are some caveats as we pointed out last week. Unlimited video comes to you at 480p (DVD quality), although an extra $25 a month will boost the resolution. And the carrier's top 3% data hogs can be throttled if they are in an area with heavy cell traffic at a specific moment.

Sprint's Unlimited Freedom also offers unlimited talk, text and 4G LTE data, but at a price of $60 a month for the first line and $40 a month for the second line. That will save you $20 a month over T-Mobile One for two lines. Sprint does say that streaming video, music and games are optimized, which is carrier code for throttled. While Sprint wasn't as transparent as T-Mobile was by revealing the resolution of its streaming, we would guess that it will match the 480p DVD quality that T-Mobile subscribers will be viewing.

AT&T has its own unlimited package, which is limited in availability to DirecTV subscribers. Pricing is $100 a month for the first line, and $40 a month for the second. And that leaves Verizon's unlimited plan. Hold on while we search for it. Uh, well folks, we can't seem to find Big Red's unlimited data plan mainly because it doesn't have one. And while that's par for the course with the nation's largest carrier (widely known as the most expensive of the big four), there might be more to Big Red's decision not to offer unlimited service. There is some talk that the carrier does not have enough spectrum to handle the rush of traffic that unlimited data would bring.

Verizon CFO Fran Shammo said a few months ago at an industry conference that unlimited doesn't work with 4G LTE connectivity. That is because carriers need to generate cash to reinvest in their infrastructure. As a result, the executive said that unlimited will eventually fade away. But analyst Walter Piecyk of BTIG Research says that the real problem is that Verizon is running out of spectrum to convert to 4G from 3G. And Verizon has promised to keep 3G services up through 2020 which limits it even more.

Piecyz says Verizon's recent move to raise rates and data caps could be a sign that it is restrained by a limited amount of spectrum. The carrier is trying cell site densification to add more cell sites, but this is going slower than expected as many cities and town are resisting the attempt to add the additional sites.


Verizon wants you to believe that offering unlimited data is a short term move used by T-Mobile and Sprint in an attempt to shake out the low hanging fruit at Verizon. Others say that a lack of spectrum is preventing Verizon from joining the other carriers. Even though Verizon spent $10.4 billion last year on AWS-3 airwaves bought during an FCC auction, the nation's largest carrier is going to have a tough time convincing everyone that a spectrum shortage isn't the issue here unless it comes up with an unlimited plan of its own.

source: BTIG (RegistrationReqd.), FierceWireless

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24 Comments

1. therealestmc

Posts: 679; Member since: Jul 23, 2012

We all know it's about the dollars.

8. Elfmonster unregistered

Verizon has revenue of $35 billion and posts regular profits of $4 billion per quarter, stiffing you to make billions for board members, if I'm not mistaken, so it is unsustainable for Verizon to cut customers a break without losing their seat in the fifth layer of hell.

14. QWIKSTRIKE

Posts: 1461; Member since: Mar 09, 2010

5 gigs of data a month was also unsustainable until they decided to charge you through the nose for it. It's called pay to play so that they can make big profits as mentioned to satisfy the stock holders

19. TheHitman1982

Posts: 97; Member since: Dec 30, 2014

Maybe Verizon should use all that money that they make from everyone to invest in the infrastructure instead of putting it into the board members pockets. Verizon is a TERRIBLE company and there service is garbage and expensive. I really hate that they can get away with the way they do business.

2. Dr.Phil

Posts: 2478; Member since: Feb 14, 2011

It seems so long ago now, but I remember the good ol' days when you could get unlimited 3G data from AT&T and Verizon for $35/line. Was that not sustainable?

6. phonehome

Posts: 812; Member since: Dec 19, 2014

Actually was $30 per line (in addition to voice minute and text allowance). And some like myself still have it, though the rates have been raised (now $50 with Verizon and $35 on ATT).

3. Elfmonster unregistered

Right just like how Cox cable doesn't give you unlimited data at home for $50 a month. Uh huh not sustainable at all.

4. MikeG77

Posts: 426; Member since: Nov 24, 2008

Fran no one believes your BS comments about Unlimited 4G data being unsustainable! They way I see it Verizon should have used the money from the AOL and Yahoo deals to build out the network as to handle the increased traffic and buy more spectrum. Instead you scam customers into tiered data with unlimited text and talk under the guise that its for their benefit because they will save money. In reality it's in the best interest of Verizon to move you off unlimited data because now they can charge you overages when they move you over to a tiered data plan. Just come out and say that "having unlimited 4G data is not financially feasible because we make more money on offering people tiered data plans and overages"

5. TreyTreyTaylor

Posts: 728; Member since: Dec 21, 2010

Agreed. Verizon disgusts me with their bullsh*t

7. phonehome

Posts: 812; Member since: Dec 19, 2014

Actual bullsh*t probably doesn't stink as bad as the animal is herbivorous. Verizon on the other hand feasts on blood (non-coincidently they are known as "Big Red").

16. L0n3n1nja

Posts: 1581; Member since: Jul 12, 2016

Verizon drops you to 2g now instead of charging data overages. Not that I'm trying to defend them, their data rates are still expensive, no reason they can't offer unlimited data and restrict it from working on Hotspot like Tmobile and others.

17. Akuma10

Posts: 13; Member since: Sep 23, 2015

Yand you have to pay $5 extra for the feature if your not on a Xl plan I believe

9. jeroome86

Posts: 2314; Member since: Apr 12, 2012

Hey Verizon. You know what you can do? Verizon doesn't work good at my job anyway. 2 co workers use that service and non stop buffering on YouTube.

10. joevsyou

Posts: 1093; Member since: Feb 28, 2015

what Verizon says is B.S but you know what's more B.S? T mobile new plan that claims to be unlimited and charged you a premium fee to watch or listen to music in HD

21. TheOracle1

Posts: 2340; Member since: May 04, 2015

Why is that BS? If an airline gives you unlimited air miles for Economy class would you say it's worthless because have to pay to upgrade to Business or First Class? At least it's offered, however limited you think it is. Certainly better than anything Verizon offers.

11. flasc17

Posts: 13; Member since: Aug 16, 2013

That is precisely what "unsustainable business plan" means in the corporate world... "We're not making enough money to continue conducting business this way." He said it in Corp-speak.

12. torr310

Posts: 1692; Member since: Oct 27, 2011

The rates for data should be going down. Even it stays about the same isn't acceptable. No unlimited data is fine but each carrier should offer data at lower prices.

13. torr310

Posts: 1692; Member since: Oct 27, 2011

It is better if Verizon didn't respond, so people would not have something to laugh at.

15. underwood2012

Posts: 61; Member since: Sep 12, 2009

I have seen this mistake several times and I think a clarification needs to be made: AT&T’s unlimited data plan requires either U-verse TV or DirecTV. It is not only AT&T’s DirecTV customers who qualify.

18. tedkord

Posts: 17456; Member since: Jun 17, 2009

Fran Sham is a liar.

20. johnh3

Posts: 147; Member since: Aug 23, 2012

If you read the fine print in the T-Mobile deal maybe its are not as good as many think.

22. Larry_ThaGr81

Posts: 593; Member since: May 26, 2011

It is sustainable, Verizon just wants to maximize their profit and they can't do so if they offer unlimited 4G LTE data. However, past practice indicates that Verizon will hop on the bandwagon.

23. tomn1ce

Posts: 248; Member since: Mar 12, 2012

If they are running out of spectrum why did they sell spectrum to T-Mobile a few years ago. They were happy to charge $30/month for unlimited 3G years ago and carried that price over to 4G. Now they're saying it's not sustainable by the network what a pile of crap. They should say it how it is.

24. ebilcake

Posts: 1231; Member since: Jul 16, 2016

Just limit the speeds? say the maximum is 100mbps then have three or even four speed tariffs starting at 20mbps. Then again who the hell needs more then 20mbps on a mobile device anyway? The speeds posted these days from some locations are ridiculous, it's not the amount of data that should be limited in some cases, it's speed.

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