Verizon Wireless To Announce Tiered Data Plan

Verizon Wireless is expected to introduce next week a tiered data plan that will lower the monthly cost of using a smartphone.

If Verizon introduces the plan Oct. 28, as reported Tuesday by The Wall Street Journal, then it will follow four months after rival AT&T introduced a two-tier pricing structure for smartphones, including Apple's iPhone. Verizon's tiered plan would cost $15 a month for 150 MB of data, plus 10 cents for each megabyte over the limit. The company planned to continue offering unlimited data for $29.99 a month, the Journal said.

A Verizon spokesman contacted by InformationWeek declined comment, calling the report "rumors."

Nevertheless, tiered pricing for data is likely to spread among wireless carriers, which face huge increases in the number of devices tapping into their networks to browse the Internet, download email and applications and stream music. According to the International Telecommunications Union, there will be an estimated 5.3 billion mobile cellular subscriptions globally by the end of the year and 90% of the world's population now has access to mobile networks.

With so much potential traffic, service providers will have to recoup the cost of building out networks through plans that are affordable to as many people as possible, while also forcing heavy users to pay more. In June, AT&T introduced a $25 monthly plan with 2 GB of data a month and a $15 plan with 200 MB per month. People who were already paying for an unlimited data plan were given the option of keeping it or choosing a lower-priced option.

AT&T switched to tiered pricing in part to ease the congestion on its network from smartphone users, particularly iPhone users. In announcing the new plan, AT&T noted that its network usage had grown 5,000 times in recent months.

Verizon is expected to offer the new plan as a promotion until the end of the year. However, the company has been considering tiered pricing for months, and analysts expect it to extend such plans to the higher-speed, fourth-generation network the company is rolling out starting this year.

SEE ALSO:

AT&T Unveils Metered Data Plans

Verizon Wireless Considering Tiered Pricing