Verizon Wireless, AT&T lower voice plan prices
Published: Friday, January 15, 2010 at 10:24 p.m.
Last Modified: Friday, January 15, 2010 at 10:24 p.m.
NEW YORK — The fight for cell phone users heated up Friday, as the country's two largest wireless carriers cut their calling plan prices.
Verizon Wireless, the largest cell phone carrier in the U.S., said early in the day that, starting Monday, it would start charging $70 a month for an unlimited monthly calling plan. The same plan previously cost $100.
This also brings down the monthly cost for users of the company's high-end smart phones like Motorola's Droid, which require a $30 per month unlimited data plan. An unlimited data and voice plan will now cost $100, rather than $130.
Rival AT&T Inc., the nation's second-largest wireless carrier, responded late Friday by announcing some of the same price cuts. Starting Monday, it, too will charge $70 for an unlimited calling plan that had also been $100, and offer a $100 plan with unlimited voice and data for smart phones like Apple Inc.'s popular iPhone (also down from $130).
The latest moves in a long-running pricing competition between the nation's wireless carriers is not just leading to lower prices for some customers: It also shows that data use is becoming an increasingly important service for mobile carriers as they look to new sources of revenue from customers dependent on mobile access to e-mail and the Web.
In fact, with the latest round of changes, both companies are requiring more customers to buy the data plans used to access the Internet and check e-mail on high-end mobile devices.
Verizon customers who buy any 3G, or third-generation multimedia phones will now have to sign up for a $10 per month data package, which gives them 25 megabytes a month. Such multimedia phones are not the high-end smart phones like the Droid, Verizon said, but phones such as the LG enV series, offering HTML browsing, music and other features like keyboards.
Jefferies analyst Jonathan Schildkraut estimates this means about 3 million to 3.5 million Verizon customers who will now be forced into spending at least $10 a month on data.
The company is also discontinuing a plan that cost $20 a month for 75 megabytes.
AT&T, meanwhile, will require its customers that use the multimedia phones it offers to have at least a $20-per-month texting or Web browsing plan.
AT&T spokesman Mark Siegel said the pricing changes reflect AT&T's desire to remain competitive in the wireless market.
Verizon Wireless also introduced new prepaid calling plans, at a monthly rate $5 above what it charges for post-paid customers who sign a contract. It is asking $75 per month for prepaid unlimited calls. This is more than what low-cost wireless carriers such as MetroPCS Communications Inc. and Leap Wireless International Inc. are charging, a sign Verizon Wireless is not necessarily interested in getting in a price competition in this area.
Verizon Wireless is a joint venture between Verizon Communications Inc. and Britain's Vodafone Group PLC.
Shares of Verizon Communications fell 64 cents, or 2.1 percent, to finish trading at $30.58.
Shares of AT&T Inc., fell 16 cents to $26.70.
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