Verizon is considering charging users based on the speed of their wireless data connection as well as the amount of data they consume every month, the Wall Street Journal reports.
We can blame the carrier’s LTE 4G network for the move. Verizon is aiming to roll out its 4G network in 38 cities across the US by the end of the year, and it’s currently in the process of working out how to charge for the service. Since its LTE network can deliver speeds between 1 and 12 megabits per second, the carrier could easily implement a tiered pricing structure based on speed like home broadband plans, Verizon CFO Fran Shammo told the paper.
“If you want to pay for less speed, you’ll pay for less speed and consume more, or you can pay for high speed and consume less,” Shammo said.
The pricing scheme would be a significant change for wireless plans, which usually focus on the amount of data you use. It’s tough to introduce tiered speed pricing on 3G connections, since there isn’t much bandwidth to carve up (3G connections are typically around 1.5 to 3Mbps), and it’s difficult for carriers to offer consistent 3G speeds.
But with Verizon’s 4G network topping out around 12Mbps, the carrier could conceivably offer a 3 or 6Mbps plan — which for most people would still appear to be faster than 3G.
The tiered pricing wouldn’t mean the end of unlimited data plans, according to Verizon CEO Ivan Seidenberg. “We need to get into it, figure out what the customer thinks is fair, and go from there,” he said.
Seidenberg expects data users on Verizon’s network to grow from today’s 23 percent to 75 percent over the next three to four years. He went on to say that it wouldn’t surprise him if 30 percent of users are using more than 1 gigabyte of data a month by 2016 or 2017. Personally, I think he’s aiming a bit low.
I wouldn’t be surprised to see other carriers following suit when they get their 4G plans figured out. Not every customer will need the full speed offered by 4G networks, so just like home broadband, a cheaper option could be better for the consumer and keep unnecessary load off of the wireless network.