Verizon Entering Tiered Data Plan Market with $15 Capped Data Subscription

The addition of a less costly subscription plan for Internet use by smartphone users by Verizon is likely a response to AT&T’s own similar move. With the explosion of handsets that use the Internet as a matter of course and the recession in the economy, many users have been eschewing upgrades to their phone in lieu of avoiding costly data plans—by changing data scheduling to offer plans that permit lower costs for lower use, companies are hoping to lure upgrades and more widespread use.

The Wall Street Journal’s technology blogger Roger Cheng brings us news on the subject,

The new $15 plan will be available on Oct. 28 for new customers, and requires a two-year contract. Existing customers have the option of moving to the less expensive option, or keeping their current plan. The pricing change was first reported by technology blog Engadget.

The move is part of a broader shift by carriers to change how they charge customers for the use of Internet, email and music downloads through their cellphones. Carriers have to juggle offering these data services at a fixed rate with sufficient investment in the underlying networks to ensure the traffic flows smoothly.

Carriers have also been investing a great deal in LTE and 4G networks, which will rely heavily on having as many subscribers as possible; by giving consumers a reason to upgrade their handsets to devices that will use these networks the carriers will build a subscriber base that will help light up those projects.

AT&T’s capped data plan came in June, offering a $30 unlimited subscription alongside a $15 plan with 200 megabytes and a $25 plan with 2 gigabytes. By comparison, the Verizon plan—which is expected to be sold as a holiday promotion initially—will offer only 150 megabytes. Plans by both companies charge customers an extra fee when they go over their limit (with costs going up towards $15 for the AT&T plans.)

Data capped rates certainly look like an extremely economical way for smartphone users to get data on their phones without incurring too great of expense. Good for people who only sporadically check their e-mail, web pages, traffic, and et cetera; but it’s probably not the best sort of plan for users who want to stream movies or music to their phones like most of the commercials want to sell them to us. The real kicker will be who downloads an app that tracks their usage and immediately warns them before they push themselves into the danger zone and jump from the low cost plan back into the expensive one due to an overage fee.