Sprint And Verizon CEOs Dish On Tiered Pricing - InformationWeek
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9/23/2010
11:32 AM
Eric Zeman
Eric Zeman
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Sprint And Verizon CEOs Dish On Tiered Pricing

Sprint CEO Dan Hesse and Verizon Communications CEO Ivan Seidenberg both recently spoke publicly of their respective firms' plans to introduce tiered pricing models.

Tiered pricing seems to be a foregone conclusion, at this point. Earlier this year, AT&T switched from offering unlimited data bundles to two different price tiers for wireless data.

Verizon CEO Seidenberg says that it will introduce tiered pricing for its Long Term Evolution 4G network within the next four to six months. Seidenberg said, "We didn't need to be first on tiered pricing. We're not sure we agree yet with how [AT&T] valued the data." He indicated that Verizon's pricing structure for data would not be the same as AT&T's. AT&T charges $15 per month for 200MB and $25 per month for 2GB.

Sprint's CEO took a slightly different angle. He said that Sprint has no immediate plans to change the way it charges for mobile data. Sprint currently offers a number of "Everything" plans, which bundle talk, text and data. Hesse said these plans are popular, though the heaviest users are causing it to lose some money.

This doesn't mean tiered pricing is out of the question, however. "We are watching very closely," Hesse said. "We're not ruling out metered pricing. Tiered pricing is something we look at. But customers really do value simplicity."

Verizon Wireless has long hinted that it would introduce tiered pricing with the launch of its LTE network. It is prepared to light up close to 30 markets with LTE later this year, and more throughout 2011. Four to six months from now is January to March of 2011.

Verizon will need some sort of device to work with the LTE network, otherwise launching it would be useless. Verizon has said that devices such as laptop dongles and other similar hardware will be first to access and use LTE. So does that mean the initial contracts sold on the LTE network will offer unlimited data?

What's more interesting is the timing of the tiered data plan launch. Verizon has been consistent in saying that new smartphones won't arrive for LTE until 2011. This aligns nicely with the January to March timeframe in which tiered pricing is said to be offered. The implication is that the tiered data will launch at the same time as the first LTE smartphones.

Verizon didn't say how or if tiered pricing would also be applied to its CDMA 3G network.

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