Once again, Verizon has announced an important new mobile device — in this case availability of Apple’s iPhone — without telling people how much it will cost to use that device on Verizon’s network. While we’re bound to find out this information sometime soon since the thing goes on sale next month, I sincerely doubt that the techno-geek’s dream of an unlimited data plan will actually come to pass, for several reasons which I outline below.
1. They Won’t Offer Unlimited Data Because They Don’t Have To!
Seriously — this is the iPhone we are talking about here, the device some (millions) of people just have to have even though there are numerous other phones that might fit their actual needs better. As with any premium product or service, it behooves the seller to charge the highest price possible since price is usually not a factor in the purchase decision. So why give away data when millions have shown their readiness to sign up for 2-year costly contracts with AT&T, which have the standard data-download caps, even after numerous reports about how poorly that network has performed? Why offer “unlimited” if you don’t need it to close the sale?
So why doesn’t anyone challenge the rumor? I think the unusual amount of wide credibility given to a single, unnamed-source report about unlimited plans has to do more with the media’s nodding knowledge of how the Wall Street Journal probably got its information for its Monday story, where it credits “a person familiar with the matter” as saying Verizon is “confident enough” in its network to offer unlimited-data plans. Anyone in the PR and media business knows this game — the “person familiar with the matter” is most likely a Verizon executive who spoke to the Journal in advance of the announcement with the unspoken agreement of a story in the WSJ as the exchange. It might not have happened that way, but it’s as good a guess as any when you see the “person familiar with the matter” sourcing.
But what might have gotten lost in translation is that for years the cellular industry including Verizon called its plans “unlimited” even though they had monthly data caps which few users ever reached. So what was called “unlimited” in that shadowy interview and what really materializes may be one of those cellular-industry definitions of reality. Either that, or it will cost $200 or more a month for a true “unlimited” plan. I’d be confident of my network then too.
2. Even if Verizon Wanted to Offer Unlimited Data, They Don’t Have the Spectrum to Do So
This is a point that could be contested, but since we’ve never been able to get anyone at Verizon (or at AT&T for that matter) to talk in specifics about just how much spectrum they really have and how technically it can actually be used, we’re taking some educated guesses. But no matter how well Verizon has built its network and no matter how much backhaul it has built to its cell towers, it can’t create wireless spectrum and at some point if you keep adding users and those users increase their usage, you are either going to run out of bandwidth in the ether, or you are going to have to put a new antenna tower on every block. Since the latter thing ain’t happening, the former thing is a certainty if millions of iPhone users join Verizon with unlimited-data plans.
And while some industry watchers think Verizon’s new 4G LTE network will help open up the current cellular infrastructure, I don’t buy into this line of thinking, because even the 4G phones coming out this year will rely heavily on the 3G network for all voice communications and for a lot of activity in non-covered 4G geographical areas. So there isn’t going to be a lot more space on Verizon’s networks all of a sudden because of LTE. And as AT&T found out, iPhone users chew up a whole lot more data transmissions than other device users. So from our spectrum-guessing seat I just can’t see how Verizon would find space for all the folks who might want an unlimited-contract iPhone. Unless they do plan on building a cell tower for every block.
3. If They Offer Unlimited for the iPhone, They Would Need Unlimited for All Their Phones
I’m trying to imagine the call Lowell McAdam would get from either Samsung, HTC or LG if and when an unlimited-data plan for the iPhone is announced. “Um, Lowell? Remember all that work we did trying to get our LTE phones ready for you guys? Are you telling us that you’re going to offer unlimited contracts for our phones too? Otherwise who in their right minds would buy one?”
This is sort of a rehash of the first reason but with a distinction — imagine yourself walking into a Verizon store and on one counter you have the iPhone (the iPhone!) with an unlimited data plan (and a built-in hotspot so it is also unlimited data for your laptop) and on the other counter you have several lookalike Android-based phones… whose data plans have monthly limits. This is not a hard choice for you as a consumer, but it would be a tough one for Verizon’s device partners to swallow if it would come to pass. Which is just one reason why it won’t, and why the data plans for the iPhone will most likely be something familiar to all of us — a monthly price of about $60 to $80 for a good chunk of mobile data, like the very fair $50 (for 5 GB) and $80 (for 10 GB) that Verizon is now offering for its LTE laptop modems.
If I am wrong and Verizon does offer a true unlimited-data plan? Then you might have to shove me out of line at the store when they go on sale. But I’m not making any plans to camp out, and neither should you.