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Verizon Wireless is finally getting its hands dirty in this price war.
The company on Thursday officially introduced “More Everything,” a plan that promises more data, 25GB of cloud storage, and unlimited international messaging. Most important, it finally gives customers who have opted for its Edge monthly installment plan a break in their monthly bill, moving to a standard pricing model embraced by every other carrier. The changes going into effect today.
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Details of new plan had been leaked early on Wednesday.
“More Everything” is Verizon’s return salvo following a recent flurry of activity from rivals AT&T, T-Mobile, and Sprint. That Verizon, which has largely stayed above the fray with its claims of network superiority, was motivated to introduce this plan underscores the intensifying competitive environment in the wireless world. The reality is that there are fewer consumers up for grabs, and the carriers are getting more aggressive in picking off subscribers from each other.
Under “More Everything,” participants with Edge — a monthly payment installment plan that allows customers to upgrade to a new phone early — will get $10 off of their monthly access charge if they choose up to 8GB of data. The discount doubles to $20 when a customer chooses a data bucket of 10GB or higher, a move designed to get families to bundle their accounts together. The discount only applies to the monthly access fee — customers still need to pay a separate charge for data, phone calls, and text message.
In addition, single users signing a two-year agreement may get a discount depending on their plan. The discount ranges between $5 and $10, and only affects the lower tier options. Verizon also introduce a new 3GB, $100 plan with a two-year contract.
Verizon is also increasing the amount of data for some plans, making the cheaper options a bit more attractive. The $40 plan, which had offered 500MB of data, will now come with 1GB of data, while the $50 plan shifts up from 1GB plan to 2GB, and the $60 plan bumps up from 2GB to 3GB. Customers will see their data allowances doubled automatically.
At first glance, the new offer isn’t quite as attractive as AT&T’s recently reduced plans, and is still higher than the plans offered by T-Mobile. A 10GB plan for four people would cost $180 a month (as well as the device cost). AT&T’s comparable plan is $160, while T-Mobile’s plan (which provides 2.5GB per person before it throttles the connection) costs $140 a month.
Verizon has long positioned itself as the premium carrier, and these changes reflect that continued belief.
“The danger of charging too little is always that people think there is a catch, because there is usually a catch,” said Recon Analytics analyst Roger Entner.
T-Mobile CEO John Legere was on Twitter to criticize the new plan, calling it a copy of AT&T’s recent cuts.
“The copy of a copy never looks good,” he tweeted.
Hope everyone is looking at the fine print for this one. #More is just a @ATT #MobileShare copycat – the copy of a copy never looks good.
— John Legere (@JohnLegere) February 13, 2014
While the discount to Edge customers is welcome, the other carriers also offer discounts to customers who bring their own phone or buy a phone outright. The rationale is that if carriers are no longer providing a subsidy for the phone, they should cut their rates to reflect the change. Those customers appear to be stuck paying full price at Verizon.
Under Edge, customers can upgrade their phones as frequently as every 30 days. Customers need to trade in their old device and pay off 50 percent of its cost before moving to a new smartphone.
As part of “More Everything,” customers will get three free months of Family Base, a service that helps manage their wireless experience, and international long distance, providing lower rates for phone calls overseas. After the first three months, the add-ons will cost $5 a month. The free 25GB of cloud storage was previously $3 a month.
T-Mobile kicked everything off a little more than a year ago, eliminating contracts and reducing the price of its monthly plans. Instead, customers would have to pay a monthly fee for a new phone, or bring their own phone to the service and enjoy the break. In January, it took a step further by offering to buy customers at rival carriers out of their contracts.
Verizon Wireless
Sprint followed suit, and in December, AT&T also began giving customers who jumped on its Next upgrade program or brought their own phone a price break. Earlier this month, AT&T cut the price of its shared data plans, directly targeting Verizon in its commercials.
Verizon’s price move was widely expected after the company posted fourth-quarter results that saw pressure on the low end, particularly with feature phone customers. Verizon Chief Financial Officer Fran Shammo said last month that the carrier would “respond accordingly.”
While Verizon’s fourth-quarter addition of 1.7 million net new connections appeared positive on the surface, a closer look showed that while it continued to add smartphone customers, it lost 576,000 basic phone customers. AT&T and Sprint suffered similar fates as T-Mobile has shown impressive growth.
Verizon is hoping “More Everything” can reverse the recent slowdown in growth.
Correction, 9:02 a.m. PT: This article originally misstated the price of the T-Mobile plan for four people. T-Mobile’s plan costs $140 a month.
