Verizon iPhone Data Pricing Undercuts AT&T

By James Mowery

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Some were wondering what the pricing model for the Verizon iPhone would look like. Questions over whether not not there would be unlimited data and whether or not increases in pricing have been echoed. Well, it would appear that we have our answers, and AT&T is quick to respond with countermeasures of their own.

As I mentioned before, AT&T is going to have a difficult time ahead of itself. The company must compete by being different, being better, or being cheaper. Unfortunately, AT&T isn’t different or better in virtually every aspect when compared to Verizon. However, the company can be cheaper — and it looks like AT&T is already playing that card, especially if plan on standing up against Verizon.

The Verizon iPhone’s pricing starts at the normal rates for voice, which is both expected and fair (even if you don’t use nearly enough voice minutes to justify it, like me). When you get to data pricing, it will also remain the same as it has been for quite awhile now: $30 per month for unlimited data. This means there will be no changes and no price increases for owning an iPhone on Verizon.

For current Verizon customers, this is a victory. Even I had thought that Verizon might try to sneak in a bit of a price hike, but it turns out that this wasn’t the case. So, Verizon customers can rejoice, as things will remain the same.

Verizon Isn’t Cheap

That said, if you are on AT&T’s network and are considering a switch, you might want to pay attention to what I’m about to say — it is now that time to accept that you will be paying a premium to be with Big Red.

AT&T and Verizon sees things differently as far as pricing is concerned: AT&T charges $15 per month for 200MB of data and $25 per month for 2GB of data. Verizon, on the other hand, will charge $30 for unlimited data. Simple enough. Assuming you were on the new AT&T data plan for 2GB per month, you would end up paying $5 per month extra on Verizon’s network on data alone — this adds up to $120 over the span of a two-year contract. But it doesn’t end here.

Verizon also has fees for things like text messaging, voicemail, and other things you might have previously had for free with AT&T: AT&T charges $10 for 1,000 text messages while Verizon charges $10 for 500 text messages, Verizon also charges additional fees for visual voicemail and other nonessential things as well.

For those looking for value, this could be a conundrum. It is safe to assume that the typical consumer who wants the least amount of voice minutes, the best data package available, unlimited texting, and similar features will pay at least $120 more on Verizon than AT&T over the span of a two-year contract. However, it could be higher depending on what features, price of insurance, and whatever else you wish to add to your plan.

Then again, Verizon also has a lot more coverage to offer than AT&T does. Big Red has the power of the network. Verizon will also argue that they have substantially better 3G coverage and they have their 4G network coming along nicely. AT&T, unfortunately, is lacking in this department, especially around my neck of the woods (are you listening to me, AT&T?).

Still, AT&T does have a few arguments of its own: (1) AT&T is cheaper, so you could stick with us for better value; and (2) AT&T offers voice and data at the same tome, and you can’t do that on Verizon. We can expect AT&T to push attack with an onslaught of marketing material that makes those two points the focus.

In return, I expect Verizon to create commercials that downplay the advantage of having voice and data at the same time — perhaps they will give it a comedic spin where they argue that not many people do voice and data at the same time or that Verizon doesn’t drop calls.

AT&T Is Fighting Back

But AT&T isn’t waiting. They company has already taken steps to make the iPhone appeal more to existing and, potentially, new customers.

First, they announced that the iPhone is cheaper than ever before, which could appeal to new subscribers. It makes sense that they would do this, but it also doesn’t seem like it would help too much because everyone who wants an iPhone will already have one or will be waiting for Verizon’s iPhone to be released on February 10. Still, I could see some consumers taking advantage of the incredible deal AT&T is offering — we all know that iPhones are not cheap.

Next, AT&T has been offering customers unlimited data if they threaten to switch to Verizon. This is, admittedly, a desperation move to keep their current customers from switching. Indeed, if it means asking customers to pay a little more money for data packages that they may not fully take advantage of (assuming many of these customers don’t exceed 2GB of data usage per month), it seems like a logical decision for now. It could work into AT&T’s favor.

Finally, the company has already lowered its texting packages to make them more competitive.

It also wouldn’t shock me if AT&T announces a slight decrease in prices for smart phone data in the near future, even if it is only a temporary drop to take some of the flair out of Verizon’s offering of the iPhone on its network. But that would be a last ditch effort — only if things get really bad.

Technological Warfare

Essentially, it is going to be a back and forth between the two telecommunications giants, which is sure to have plenty of controversy and lawyers involved. AT&T has taken more action than words recently, which shows that the company is serious about retaining its current customer base of iPhone users. Verizon, on the other hand, has been playing up the iPhone in the marketing department; we are already beginning to see advertisements.

Things are only heating up, though. It is going to be incredible to witness if people will be lining up outside of Verizon stores to pick up an iPhone like we did with AT&T. If so, Apple will have plenty to be excited about. Verizon will also surely be excited to add the greatest smart phone in existence to its network.

But one thing we can’t forget is that this is also a win for the consumer. Competition brings lower prices and better features for everyone. We are already beginning to see lower prices from AT&T and better features with the (sudden, albeit temporary) return of unlimited data packages.

This, of course, is only the beginning. In a few months, both of these carriers will be battling it out to win consumers all over again when the iPhone 5 arrives. Either way, it’s a great time to be in the market for an iPhone, and it is going to be a crucial year for AT&T and Verizon.

About James Mowery
James Mowery is a passionate technology journalist, entrepreneur, and Apple enthusiast who has written for various top-tier publications like Mashable, Techi, and CMSWire. Follow him on Twitter: @JMowery.

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