Shared Data Plans on Tap from Wireless Vendors

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We noted earlier this morning that Verizon Wireless, the joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc (NASDAQ: VOD), will not offer unlimited data plans to existing customers when they upgrade from the company’s 3G network to its 4G network. Instead, Verizon is dangling an offer of a shared data plan that would allow a subscriber to pile up usage on more than one device. Currently each smartphone and tablet is required to subscribe to an individual cellular data plan.

AT&T Inc. (NYSE: T) has been talking about a similar plan for at least a year now, while Sprint Nextel Corp. (NYSE: S) and T-Mobile USA, which is owned by Germany’s Deutsche Telekom AG (OTC: DTEGY), still focus on family plans that offer limited 4G data for up to two phone lines, which is not the same thing.

The carriers see the shared data plans as a new opportunity for growing revenues. The new iPad from Apple Inc. (NASDAQ: AAPL) with its high-resolution retina display can chew through a standard 2 Gbyte data plan in just a couple of hours of streaming video.

At its investor meeting yesterday, Verizon had this to say:

As [subscribers] start to migrate into 4G, they will have to come off of unlimited and go into the data share plan. And that is beneficial for us for many reasons, obviously.

And that “obviously” means that more subscribers will purchase the more costly cellular-enabled tablets and use more data, boosting monthly payments to Verizon Wireless. With only Verizon and AT&T likely to offer the plans, at least at the beginning, subscribers should not be looking forward to any great bargain. The shared data plans are not intended to be a public service.

Paul Ausick