Exploring the Customer Centricity of Mobile Data Plans
In the next few weeks, both Verizon and AT&T are expected to introduce family data sharing plans where customers will pay for a fixed amount of data to be shared between family members or between device types (e.g. 5 gigabytes for two devices instead of 3 GB for one), according to USA Today. For its part, Verizon would phase out unlimited data plans for customers who renew their contracts or upgrade to new phones. Only customers who pay full price for their mobile phones will be able to keep their unlimited data service plans for a flat $30 monthly fee.
The data sharing plans are intended to help these carriers grow revenues and profit margins and to entice consumers that are currently using mobile phones for just text or voice. Carriers are rolling out capital intensive 4G Long-Term Evolution (LTE) technology networks that are expected to make it easier and faster for consumers to access the mobile web. Data plans hauled in $62.7 billion last year, according to CTIA.
For its part, Verizon claims customers want to share data, just as they share voice minutes. Really? Having to track monthly data usage between multiple family members seems like a hassle to me.
On the surface, the data sharing plans don't appear to be customer-centric in an industry where customer experience and loyalty ratings have historically been poor. According to the 2012 Temkin Experience Ratings of 206 companies by 10,000 consumers, Verizon and AT&T (tied for 193) rank near the bottom of the pack. Meanwhile, when it comes to customer loyalty, Verizon ranks 157th out of 206 companies while AT&T comes in at 176th, according to the 2012 Temkin Loyalty Ratings.
Neither Verizon nor AT&T has announced how the shared data services will be priced. But at least one rival--T-Mobile--has come out publicly to announce that it won't be following suit.
In a recent blog he posted on the topic, T-Mobile senior vice president of marketing Andrew Sherrard writes, "Some of our competitors are backing away from simple, unlimited data and moving to family shared data plans. But would this approach actually deliver a better value to consumers? Do families really want to keep track of each others' data consumption? We don't think so." Sherrard goes on to write how data plans should be flexible, affordable and worry-free. Meanwhile, Sprint continues to offer unlimited data plans for its smartphone subscribers.
Some analysts say the data sharing plans offered by Verizon and AT&T are expected to be structured in such a way to make it easier for customers to add new devices, including tablets or laptops. Under most plans today, if a customer buys another wireless device, like an iPad, they have to add a separate data plan.
There is logic to creating all-inclusive data plans that customers can use for multiple devices, both from the customer's standpoint and for the carrier. Rogers Communications Inc., Canada's largest wireless carrier, added shared data plans in 2009. Since then, more than 25 percent of its family plan subscribers have signed up for shared data plans, according to Rogers' vice president Reade Barber in a Delawareonline.com article.
Carriers are looking to cash in on the mobile data services boom. They're also looking to recoup the costs of building out expensive 4G LTE networks. Meanwhile, customers should expect to pay for data consumption. But do customers really want to be hassled with monitoring their monthly data usage in tier-based data sharing plans or run the risk of having to pay overage charges? Time will tell, and no doubt Verizon and AT&T will each continue to add and re-sign subscribers.
It's not entirely fair to weigh the merits of these data plans until the pricing is announced. Still, this shift in how data plans are being structured opens up tremendous opportunities for other carriers to offer customers flat-rate data plans that are simple to understand and pay for.
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