In this edition of Ask Maggie, I’m going to handle things a little differently than usual. Typically I select a couple of questions that I’ve received from readers and I answer them. But since I have gotten so many emails asking me about this particular issue, I 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 I haven’t answered your question in this FAQ, please feel free to send it to me directly. I will try to answer via email or I will feature more questions next week my next installment of Ask Maggie. As one TV interviewer said to me this week while I was helping him understand the new plan, “This is so confusing, Maggie. You’ll be answering these questions until you die.” I sure hope it doesn’t take that long to get things straight!
Let’s start with the basics. What is the new pricing that Verizon announced this week?
Starting June 28, Verizon will eliminate its individual talk, text and data plans as well as its shared voice and text family plans. Instead, it will offer “share plans” that will allow people in a family to share buckets of data among smartphones as well as among tablets, hotspots and other connected devices to their data plan.
Unlike the old plans, every plan now comes with unlimited voice and text messaging for smartphones and feature phones. 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.
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. And for families or individuals who use far less than 1GB of data per month, the new plans can offer them big savings. But for the most part, individuals and families will spend about the same amount of money for roughly equivalent services.
Take a made-up example of a family of four. They have 2 tablets, 1 hotspot, 3 smartphones, and a feature phone. Under their existing family plan they subscribe to 2,000 voice minutes, giving each family member 500 minutes per month of talk time. And they have unlimited texting for $30 a month.(With weekend calling and any to any mobile calling, 500 of voice minutes per individual is plenty for many households.)
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. Tablets could receive 2GB of data for $30 a month. The mobile hotspot got another 2GB of additional usage for $20 a month. And each smartphone was give 2GB of data for $30 a month. In total a family of four with the number of devices I mentioned above would be given 12GB of data per month. In total, this family would spend about $320 a month before taxes and fees.
Old Verizon Family Plan
The same family would save about $10 a month if they purchased the same amount of data using the Family Share Plan.
New Verizon Share Plan
Even families of just two individuals, with no connected devices can save about $20 a month.
As 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 average iPhone user on Verizon consumes about 500MB of data per month and uses 900 minutes of voice calling. 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.
But keep in mind that data consumption is on the rise. 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.
In my mind, the concern for consumers is really about where their usage is heading. The more data they use as the network speeds improve, the more they will have to pay for that service.
Who doesn’t benefit from the new family share plan?
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. His bill could go up about $30 a month if he moved to the new plan. If he used 4GB of data per month, the difference in price would be $40 a month.
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.
Here’s how things work out for an individual.
Also, keep in mind that some customers have special or unique plans. For example, I 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. Obviously, the new plans would be a lot more expensive for him than the sweet deal he already gets from Verizon.
This leads me into the next important question: Can I keep my existing family plan or individual plan if I’m already a Verizon customer?
The answer to this question is “yes.” A Verizon spokeswoman said that Verizon will not force anyone to switch from their current plans. So if you are a long time Verizon customer and you’re happy with your service you can keep it as long as you like.
Would I still be able to continue getting subsidized phones when I upgrade if I want to keep my existing plan?
The answer to this question again is a big fat Yes! But there is one caveat. You can only upgrade and get a subsidized phone if you already have a tiered plan. In other words, if you have an unlimited data plan and you want the subsidized phone, you will have to switch to a tiered plan. You can either choose a new family share plan or you can also choose one of Verizon’s current plans. That’s right — if you’re already a Verizon customer, you can choose from one of the older plans even after the company stops offering those plans to new customers.
If I am a new Verizon Wireless subscriber after June 28, and I don’t want a share plan, can I sign up for one of the old individual plans?
Unfortunately, the answer to this question is no. All new Verizon Wireless customers will only be offered the Family Share plans going forward. That goes for individuals as well as families.
Is there anyway to beat the system if I’m an unlimited data customer so that I don’t have to buy a new phone at full price to keep my plan?
It’s funny you should ask. I heard today from a CNET reader named Aaron Lemmon, of Newton, Mass., who explained a trick that might work. Here’s how: Aaron is on a family plan with his mother. Aaron has an unlimited data plan. His mother, who just got her smartphone in December 2011, has a tiered plan.
In general, Verizon allows customers to upgrade their phones every 21 months or so. Aaron’s contract is up in July. If he upgraded his phone at that time, he’d have to either pay full retail price for a new phone to keep his unlimited data plan or he could take the subsidy and choose one of Verizon’s older plans or a new Family Share plan.
But Aaron believes he has found a loophole. Verizon allows people on family plans to essentially swap upgrades. This means that Aaron’s mom can upgrade her phone when Aaron’s eligibility comes up. So Aaron can upgrade his mom’s number with a phone he wants. Then after he has bought the phone and activated it on the account, he can switch the numbers. Aaron will now have his new 4G phone. And his mother will keep her phone with the new contract date. Aaron will have his mom’s contract date. But he’ll be able to keep his existing unlimited data plan.
The only catch of course, is that Aaron’s poor mother may never get to upgrade her phone, since Aaron is always using her tiered account for the upgrade.
I asked a Verizon spokeswoman to verify that this loophole does in fact exist. She confirmed that people on family plans are able to swap upgrades. But she said she’d have to check on whether there would be some kind of limitation of keeping the old unlimited plan when the numbers are switched again. I’m still waiting for her reply and will add her comment to this story.
I hope this information was helpful. To be perfectly honest, my head hurts from the mental gymnastics it takes to analyze and figure out the best options for subscribers. Please send me more questions on the Verizon Family Share plans if you have them and I’ll try to answer them.
Ask Maggie is an advice column that answers readers’ wireless and broadband questions. The column now appears twice a week on CNET offering readers a double dosage of Ask Maggie’s advice. If you have a question, I’d love to hear from you. Please send me an e-mail at maggie dot reardon at cbs dot com. And please put “Ask Maggie” in the subject header. You can also follow me on Facebook on my Ask Maggie page.