I’m one of the lucky ones. I have an unlimited data, text, and calling plan with my wireless carrier. I signed up with early iPhone and have yet to change my device. My family is also on the plan. But I know if any member of my family wants to change their device, I’ll get the hard sell to switch from an unlimited data plan to a limited one.
Profit-Motivated Pricing
A few months ago Verizon announced that they would no longer sell a discounted device to anyone unwilling to change to a tiered data plan. AT&T has said that anyone wanting to use Facetime on their network needs to be on a tiered plan.
It’s obvious why they are doing this. They built a 4G network, and they want to recoup the investment. At the same time, usage patterns are changing dramatically. While texting and calling are falling, data is increasing at an incredible rate.
We believe that a fair price is appropriate for increased value. But we also believe Verizon and ATT missed an opportunity. Their very visible pricing moves scream that they are all about growing their profits at the expense of the consumers.
The Missed Opportunity
Why didn’t these carriers take the time to explain the value of their new network and these phones? Do they purposely want to commoditize their service? Whether it’s the speed, access to more video and data, or more compelling apps, there is value. It’s huge missed opportunity that will continue the commoditization of their service.
In our opinion, the US wireless carriers took the easy way out: one offer for all customers. Whatever happened to segmenting the market and offering different products and services to address different needs? The data was in years ago to detect changing usage patterns. ATT and Verizon could have selectively communicated to customers during that time and seamlessly moved to a more profitable pricing approach.
Paying the Consequences
Wireless carriers blundered in their pricing approach then and now they’re blundering again. Do they not realize that Wifi networks are becoming ubiquitous? What will happen when we continue to lower our data usage on their networks and rely increasingly on the free networks in malls, coffee shops, schools, and cities? If they continue to commoditize their offering, it won’t be pretty. As far as we can see, it’s more than just bad marketing. It’s bad business.