Verizon To Offer Unlimited Data iPhone Plan, Price War

January 9, 2011 by Douglas A. McIntyre

Verizon (NYSE: VZ) will offer unlimited data plans when it rolls out the Apple (NASDAQ: AAPL) iPhone next month, according to The Wall Street Journal. AT&T (NYSE: T), previously the exclusive provider of the smartphone, offers only capped data plans.

The move by Verizon is likely to cause the one thing that wireless providers have hoped to avoid–price wars. The Verizon unlimited data plan is meant to pull customers from AT&T. AT&T will certainly match the Verizon wireless plan and may decide to offer a program which is even more competitive.

The number of wireless subscriber in the US is about 300 million, which means it is near saturation levels. The four major providers–T-Mobile, Sprint-Nextel (NYSE: S), Verizon Wireless, and AT&T — fight for market share. The industry has hoped that consumer would pay high rates for the ability to transfer video and data files. It turns out that the opposite may be true. The carriers have begun to turn to price as a means to attract customers.

The need to offer more services to subscribers for less money would particularly hurt the fortunes of AT&T and Verizon which have lost a great deal of their previously profitable landline business. A sharp drop in margins in their healthy wireless business would damage their fortunes permanently.

Douglas A. McIntyre

Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE

Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply
clicking here
you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.


Click here
to match with up to 3 financial pros who would be excited to help you make financial decisions.