A wireless commodity
February 19th, 2008 by Grant in: Business, TechnologyIt was bound to happen (again). Today Verizon Wireless revealed new plans to offer a flat-rate unlimited calling plan. They say it is an effort to attract high end customers, which may be true, but I see it as a commoditization of the wireless industry.
The plan will cost $99 per month and offer up unlimited calling to anyone in the United States. Interestingly enough, AT&T trumped Verizon by announcing a similar deal for $0.99 per month more, but also eliminating any additional roaming charges.
It is clear to me that cell phones are becoming a commodity just like the old fashion predecessor, the land line, and that the economy of scale and competition is going to force prices down.
The revenue is going to shift from voice usage to data usage, which is good news for guys like me who just want voice capability.
“Voice is the foundation of our business, and will be an integral part of our offer,” said Mike Lanman, chief marketing officer for Verizon Wireless. “Data is clearly emerging as an increasing contributor…to our revenue stream.” -Source
I think this is a telling sign of how a free market will drive down prices. I started to see a glimpse of this when Verizon offered me a lower rate on an unpublicized plan that more closely matches my usage. They didn’t want me to leave the store and head off to a competitor, so they knocked $10 off my bill just to keep me happy…
Cell phone service will only get cheaper…
Tags: cell phone | free market | Technology | Verizon Wireless
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