Verizon is unveiling a simplified month-to-month pricing plan on Thursday, and part of that plan was motivated by an unusual problem: Young people who remain on their parents' plans complained it felt as if the company's was tattling on them by sending out data usage alerts.
The company needs customers to understand how much data they're using, David Small, its executive vice president for wireless operations, said at a conference today. "But when you're in our business and you want to sell more data and you want consumers to value the data in a greater way because of their mobility lifestyle, sending out warnings that say, 'Well you're getting close to the end of your allocation' — that's not a great message to have."
"We did a lot of research on this with millennials," he continued. "And for millennials who are still on their parents' plan, what millennials told us is that in some ways, they felt like Verizon was telling on them, telling their parents about their data consumption."
"So for that and many other reasons, this notion of adding more value and having consumers move up in the curve in terms of their consumption, we think this is good for the industry," he said.
(Indeed, the only times I have come close to getting cut off the Maheshwari family plan are after Verizon's data warning messages, especially those that call out the last four digits of my phone number. I've managed to stay on the plan, thanks largely to promises to set up an automatic checking account transfer soon.)
Verizon will start selling a new pricing plan on Thursday that comes in four sizes of data consumption and unlimited talk and text: small, medium, large and extra large. Small costs $30 a month for 1GB of shareable data while extra-large is $80 a month for 12GB of shareable data; each extra GB costs $15 a month. The new so-called "Verizon Plan" is intended to simplify costs for consumers while also prodding most customers towards the largest plan.
While 6GB of data a month would work for a family of two, the extra-large plan will be best for "the vast majority of other customers," Small said at today's conference. (Verizon will also charge $20 per smartphone line and charge monthly payments or retail price for a new device.)
A survey last fall from Principal Financial Group found that parents were still paying the cell phone bills of 12% of 23- to 35-year-old Americans, the so-called "millennial" generation.