Verizon Wireless’s new Family Share plans were supposed to simplify pricing for Verizon Wireless customers.
But since the new plans were unveiled earlier this week, it seems like wireless users are more confused than ever.
Typically we select a couple of questions that we’ve received from readers and we answer them.
But since we have gotten so many emails asking us about this particular issue, we decided to put together a quick FAQ that will help explain and clarify some of the most common questions about Verizon’s pricing change.
If we haven’t answered your question in this FAQ, please feel free to send it to us directly.
As one TV interviewer said to us this week while we were helping him understand the new plan, “This is so confusing, Maggie. You’ll be answering these questions until you die.”.
Starting June 28, Verizon will eliminate its individual talk, text and data plans as well as its shared voice and text family plans.
If you had an unlimited data plan with Verizon for $30 a month you’ll want to hold on to your grandfathered phone forever.
Instead, it will offer “share plans” that will allow people in a family to share buckets of data among smartphones as well as amongtablets, hotspots and other connected devices to their data plan.
The way it’s structured, the company is offering different amounts of data at different price points.
To construct a plan, subscribers will pay a fee for a device, which is also different depending on what devices are connected to the data plan.
And then they will select a data plan based on how many gigabytes a month they plan to use across all devices on the plan.
Device fees:Smartphone = $40Feature phone = $30Hotpsot, USB stick, Connected netbook or notebook = $20Tablet = $10Data fees:1GB = $502GB = $604GB = $706GB = $808GB = $9010GB = $1002GB more of data = $10(Overage fee charged for 1GB of data)Who benefits most from the new family share plan.
The customers who will benefit the most from Verizon’s new service are individuals and families who talk and text a lot, but use wireless data service sparingly.
Since voice and texting are now unlimited, families no longer have to worry about that aspect of their plans.
Verizon made voice and texting unlimited since they were both in decline and hurting revenue per user anyway.
And for families or individuals who use far less than 1GB of data per month, the new plans can offer them big savings.
Verizon is pricing 1GB of data in $10 increments so there’s a $50 a month plan for 1GB and $100 for 10GB.
But for the most part, individuals and families will spend about the same amount of money for roughly equivalent services.
Under their existing family plan they subscribe to 2,000 voice minutes, giving each family member 500 minutes per month of talk time.
(With weekend calling and any to any mobile calling, 500 of voice minutes per individual is plenty for many households.) Chief Executive Officer of Verizon Wireless, Dan Mead, during his keynote speech at CTIA 2012.
(Credit:Lynn La/CNET)Under the old plan, all the data for the devices the family used were broken out separately with its own price and its data allotment per month.
Old Verizon Family Plan2000 minutes for 4 phones = $120Unlimited texting = $303 data plans (2GB each) = $901 mobile hotspot (2GB) = $202 tablets (2GB each) = $60Total =$320The same family would save about $10 a month if they purchased the same amount of data using the Family Share Plan.
New Verizon Share Plan2 tablets = $201 hotspot = $203 smartphones = $1201 feature phone = $3012 GB of data = $120Total = $310Even families of just two individuals, with no connected devices can save about $20 a month.
Old plan1400 voice minutes = $90 2 data plans (2GB each) = $601000 text messages = $20Total = $170New Plan2 smartphones = $804GB of data = $70Total: $150As you can see, multiple people on the same plan can either break even or even save money on what they had been previously paying.
And if your family can stay well below these thresholds, there may be opportunity to even scale your bill down further as you subscribe to lower tiers of service.
Validas, a company that examines thousands of phone bills to help people find the right service plan for them, says that the averageiPhone user on Verizon consumes about 500MB of data per month and uses 900 minutes of voice calling.
Now that situation has entirely flipped,” said Carl Howe, a mobile phone expert.. Howe says that part of the issue for cellphone companies is that most people who want a smart phone already have one. So carriers have to find new ways to make money.. “So if a company like Verizon or AT&T wants to grow, there are two ways they can do it.
If these figures are accurate, Verizon 3G subscribers should be able to live within the limits of these new data plans and they may even be able to scale back their plans to save money.
And as these average consumers upgrade to 4G devices, which consume more data and also offer faster service that allows people to access more stuff, these subscribers could easily start bumping up to 1GB of data usage per month.
And if these families are also adding 4G tablets, the data usage will go up even further.
The more data they use as the network speeds improve, the more they will have to pay for that service.
The most obvious answer to this question is that subscribers who consume a lot of data will not benefit from these plans.
In particular, customers who are grandfathered into Verizon’s unlimited data plans and are considered high data usage customers will suffer the most under these new plans.
For example, if an unlimited data plan subscriber uses about 3GB of data per month, he’d have to pay $70 plus $40 for a total of $110 a month.
With his unlimited plan he’d pay $30 a month for data and $50 for voice and text service.
But it’s not just heavy data users with unlimited plans that lose out with these plans.
Some individual subscribers on the tiered plans will also suffer, because they will effectively be paying about $20 more a month for a comparable service.
Keep in mind that the voice texting is limited under the current plans, but they will be unlimited as part of the new plans.
But for someone who is likely talking less and texting less on his phone in lieu of using data services, the unlimited voice and text are services that user will never take full advantage of.
Old Plan450 voice minutes = $402GB of data = $301000 text messages = $10Total = $80New Plan1 Smartphone = $402GB of data = $60Total = $100Also, keep in mind that some customers have special or unique plans.
For example, we heard from one reader Stephen, who has been with Verizon so long that he gets a $20 discount on his entire bill.
He is an unlimited data user and has managed to get a $35 3GB plan for his Motorola Xoom tablet.
This leads us into the next important question: Can we keep our existing family plan or individual plan if we’re already a Verizon customer.
Jason Murdoch is a business journalist based in Hobart, Australia. Jason has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Jason spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.