It 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…

Business, Technology cell phone, free market, Technology, Verizon Wireless

Last week I dropped by the Verizon Wireless store to snoop around a bit. My 2-year agreement was up, and my existing cell phone had taken a beating. In fact, the outer LCD display was cracked and non-functional from the time I put the phone in my pocket and then smashed my keys (in the same pocket) into the phone. Now I had options. Lots of options, and that is a good thing from a consumers standpoint.

At any rate, I had also been looking at my monthly cell usage. Between my wife and I, we rarely were using more than 200 anytime minutes per month, yet our plan allowed us 700 anytime minutes, and in return we paid about $85 per month after taxes and fees.

You get what you pay for, but don’t pay for something you don’t get.

As frequent readers of the Corner Office Blog know, I absolutely hate paying for something I don’t use. The way I saw it, I was paying for 500 minutes per month that I wasn’t using.

An online inquiry through the Verizon website returned an answer I really didn’t appreciate: “… sorry sir, you’re on the lowest cost family plan we offer.”

It is rarely fruitful to eArgue, and making a deal face to face is much more productive. So in addition to looking for a new phone, I was also looking for a new plan, and if that didn’t work out, a new cell provider.

Being polite will get you further…

I walked into the store, and the sharp dressed sales rep stepped right up to the plate. “What can I help you with today…” I’m looking for a new phone, and a new plan, and I explained why.

Naturally the sales rep tried to sell me a new phone first. Smart on his part: Get the customer to fall in love with something tangible, then talk money.

So I found a phone I liked, but was still willing to walk away from the whole deal if we couldn’t somehow my monthly costs.

After pounding through the computer for a few minutes, I got the same response as I did from the rep online; I’ve already got the lowest cost plan they offer. I was getting a bit aggravated, but I kept my cool and told him that I might have to go home and research the competition.

Sensing I was the type to walk right across the street to AT&T, he went and asked his boss if there was “Something we could do”. It turns out, there is a little-known plan hidden deep down in the computer for cases just like this. It’s called the Nationwide Loyalty Family Share plan, coming in at 550 minutes per month, and for $10 cheaper than the previous plan.

Interesting how they throw a loyalty plan at you to keep your business, isn’t it?

Sign me up.

It’s a step in the right direction. Instead of wanting “more for less”, I wanted “less for less”. While the 550 minutes per month is still overkill, the $10 reduction in monthly cost ($120 per year) helps.

So, if you’re looking to reduce your monthly cell phone bill, this might be a step in the right direction, if you’re a Verizon customer that is.

To be clear, if my wife and I were using the 700 minutes per month, I wouldn’t feel right about arguing for a lower cost plan that would still cover my usage. But if you’re not even coming close to maxing out your wireless plan, at least find out what your options are to pay for something more appropriate.

Frugal Living, Technology cell phone, National Loyalty Family Share, Verizon Wireless

Verizon Wireless announced yesterday that they will be revising their policy on allowing free-market cell phones to be used on their network. The change will take affect by the mid part of next year.

In effect, it will allow you to buy just about any cell phone, from any vendor, and activate it on the Verizon network.

This is big!

Not just because it gives you more freedom to use whatever cell phone fits your needs, but it also signals that the free market does have an effect, even in the highly competitive wireless industry.

What’s next? Perhaps more flexibility in pricing and plans, and even better, more accessible data streams and free interface to the internet. I for one would like to see a WI-FI card built into every cell phone, as Verizon currently disables that capability, even on phones that come with the feature from the manufacturer.

There are some aspects of this deal that have not yet been worked out, such as whether Verizon will differentiate in plan price based on where you bought your cell phone, and what features it will allow a non-Verizon cell phone to utilize.

As for now, though, this seems to be a step in the right direction, as Google and other tech companies make it easier and less costly to gain access to information and communication technology.

As a side note to the disintermediation in the cell phone sector, AT&T, Sprint Nextel Corp. and T-Mobile USA all responded to the threat of government regulation by announcing (several months ago) that they would follow Verizon’s move last year to prorate fees for contract termination rather than forcing all customers to pay early termination fees that run as high as $200. While I’m not a fan of locking customers in to an unregulated service for such long periods, this move is definitely a step in the right direction!

Economics, Technology cell phones, disintermediation, Verizon Wireless