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Verizon's sharing plans: Confusing but inevitable

A simple two-smartphone plan would save $20 a month over existing unlimited services

Reaction was mixed to the new Verizon Wireless Share Everything Plans announced Tuesday, with some analysts calling the plans confusing and others seeing the concept as inevitable, but still unproved.

"This looks incredibly complex to me, so will users even understand it?" asked Jack Gold, an analyst at J. Gold Associates on first hearing the Verizon news.

"Shared data plans are necessary and desired by customers, but I'm not sure this is any less expensive than just going with individual plans for each device," Gold said. "Even if it is cheaper, it's certainly way more complex ... Complexity is not the consumer's best friend."

Indeed, Verizon said it created the Share Everything Plans, which take effect on June 28, as a response to customers' wanting to have more than one wireless device but not having to set up a monthly service plan for each new device they buy. The plans require a monthly access charge for each device, plus a monthly charge for gigabytes of data shared, across a maximum of 10 devices.

Monthly access charges will start at $10 for a tablet and go as high as $40 per smartphone. The shared data pricing will start at $50 for 1 GB per month, and up to $100 for 10 GB per month.

In one example of the new program, service for two smartphones, plus 2 GB of shared data per month would cost $140, giving a customer unlimited voice and texting on both devices as well.

Today, under Verizon's plans, a single smartphone with unlimited talk, text and 1 GB of data per month costs $80 per month, which would be $160 for two. Under that example, the new Verizon approach would be $20 cheaper each month.

It isn't clear how successful Verizon will be with the new plans, however, said analyst Rob Enderle of Enderle Group. For customers, service costs won't necessarily be cheaper unless they add multiple devices in a single plan.

On the other hand, Verizon hopes it will benefit by bringing more customers on to cellular data services for all of their devices, while voice and texting will be free, a trend long predicted by industry officials. Free voice and texting is essentially being replaced by variable charges for data, they noted.

"Users have indicated they don't want to pay for multiple plans so they haven't connected their other devices over wide area network cellular," Enderle said. "Right now, every device has to have a plan, and data limits are not shared."

AT&T and other carriers will likely study what Verizon is doing before taking a similar leap, Enderle added. "This plan could backfire on Verizon," he said.

But Jeffrey Kagan, an independent analyst, said that shared service plans are inevitable. "Shared service plans look like they will be the future of the wireless data business," he said. "They build loyalty and keep customers longer by making it more complex to leave."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is [email protected].

See more by Matt Hamblen on Computerworld.com.

Read more about mobile and wireless in Computerworld's Mobile and Wireless Topic Center.


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