Verizon’s wireless-pricing revolution

(NECN: Peter Howe, Brookline, Mass.) - Verizon Wireless on Tuesday rolled out some of the most revolutionary changes ever made in the ways U.S. carriers charge customers for wireless data, voice and messaging services, a shift that underlines how far "wireless service" has evolved from just meaning "cell phone calls."

The new Share Everything plan, which will replace almost all current Verizon coverage plans starting June 28, may save a number of customers money compared to current plans, especially big-spending families who use smartphones, tablets, and wireless laptop connections. For individuals carrying just a smartphone, though, the plan sets a much higher entry-level price point -- $90 a month, although that would now include unlimited voice calls and text messages.

Ultimately, though, the billing plan appears to represent a fundamental change in how Verizon Wireless approaches customers: Rather than billing them by the device for phone calls and texts and various wireless-enabled devices, it will sell them the equivalent of one big bucket of bytes each month that can be tapped into by as many as 10 different devices.

Verizon spokesman Mike Murphy said that after two years of market research and 50,000 interviews, what Verizon concluded was that in 2012 many couples and families aren’t just looking to pay for a cellphone for calls and messages.

"It's smartphones, it's tablets, it's internet devices, and now you’re looking at a family [of four] that doesn’t just need four devices, they may have eight or nine going," Murphy said. And just as families have come to rely on sharing a pool of voice-calling minutes and text messages, "they are looking to share data. They're not looking to have individual data plans on every single device."

Share Everything starts at $90 a month, for one smartphone with one gigabyte of monthly data service – considerably more than Verizon’s minimum calling plans now, but that price includes for the first time unlimited voice calls and unlimited text messages. To that basic plan, customers can add access to the data from a tablet computer for $10 more a month, from a wireless-connected laptop computer for $20 a month, and additional gigabytes of data access for $5 or $10 a month. (There’s a whole different set of prices for people willing to pay full price, not a carrier-subsidized price, for a device like an iPhone or Android smartphone.)

Mark Lowenstein, managing director of Mobile Ecosystem, a Brookline, Mass., wireless research firm, said for some consumers Share Everything will wind up making service cheaper, for others, more expensive.

"If you’ve got two or three smartphones in a family, and they’re relative heavy consumers of data, this will wind up costing you less in the aggregate. It’s worse for people who have just one line," Lowenstein said. "It’s a worse deal for somebody who just has their own phone, and it’s a single-line plan. If they want to use that for data, they’ll wind up paying a little more" than under current Verizon pricing.

"This is not a great bargain for anybody," Lowenstein added, "but is it simpler, and it does provide for the sharing of data across multiple devices, and it provides a better structure for people to connect multiple devices onto the network."

Lowenstein said it makes sense as a profit-maximizing business matter that Verizon is trying to offer "stickier" service bundles so that parents have an incentive to keep each other and their kids all connected to Verizon service, because they’re all depending on the same bucket of data. At the same time, the plan recognizes how for the first time in history, people are spending less time using their phones to make phone calls, and once explosively growing text messaging seems to be leveling off, while growth of pictures and video and Web access on wireless networks is becoming the dominant service.

One big thing consumers are having to learn under this new system: What does it mean to use 1 gigabyte of data every month? Obviously, in earlier generations of wireless service, it was fairly easy to use multiplication to predict how many minutes of calls you and your family members might make in a month, or how many text messages you might all collectively send.

Going forward, subscribers will have to figure out what one or two or five gigabytes of data usage means relative to their typical family web-surfing and video-sharing habits – and one feature Verizon’s offering to simplify that is the equivalent of your car's "how many miles till empty" gauge. Murphy said while one gig is the minimum, Verizon recommends a two gigabyte plan as likeliest to help most families avoid the need to pay "overage" fees. Applications will warn subscribers when they've used 75 percent or 80 or 85 percent of their monthly data allotment, and allow subscribers to buy an extra gigabyte or upgrade their monthly plan to a higher gigabyte allotment, Murphy said.

And Murphy said the design of Share Everything envisions a coming day when, more and more, what Verizon Wireless service sells subscribers is "wireless access" to be used by however many, and whatever, devices in their household need it.

"Today we're talking about smart phones and tablets and my-fi [portable WiFi] devices, but really what we're really setting up for in the future -- beyond meeting an immediate need today -- is really all those devices that we can connect down the road. Think about connected cars. Think about connected cameras. Think about connected appliances," Murphy said, "and how all those might fit into an account like this."

With videographer Bob Ricci.