Verizon to introduce tiered pricing for LTE

27 MAY 2010

Verizon Wireless has said it will return to tiered monthly data plans when it launches its first LTE networks later this year, marking a move away from the unlimited data plans it currently offers on its 3G network. Speaking at a Barclays investor conference in New York this week, Verizon Wireless CEO Lowell McAdam (pictured) said it would make sense for LTE subscribers to buy ‘buckets’ of data by the megabyte because “people will have four or five or perhaps even more devices they will connect to the network.” According to a Financial Times report, the shift in tariff strategy is a sign that the US market leader is attempting to wean users off ‘all-you-can-eat’ data plans, which have led to an explosion in mobile data usage and caused capacity problems for some US networks (notably at its rival, AT&T). However, McAdam also outlined the cost savings Verizon Wireless expects to make using LTE, noting that the cost of carrying 1 megabyte of data over its LTE network would be half to one third of the cost of carrying the same data over its current 3G network. At the same time he said he expected all voice traffic originating from LTE subscribers to be carried as a VoIP data service by 2012, resulting in significant additional savings.

McAdam reiterated the operator’s plan to switch on LTE in 30 to 40 US metropolitan markets by the end of this year, and complete the rollout within three years. Access to the network is expected to be initially confined to mobile datacards and dongles, but McAdam said he was confident that Verizon would launch between three and five LTE handsets in the first half of next year. Some of these are planned to be unveiled at the Consumer Electronics Show in Las Vegas in January. “People will be surprised by the number and variety of [LTE] devices we will bring to the table,” he said.


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