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Verizon CEO Sees the Machine to Machine Market

| December 10, 2011


Verizon CEO Lowell McAdam expects the the company to begin offering shared data plans for smartphones, combining the plans for different devices on the same account into a single plan.
McAdam’s comments came during an interview during the UBU Global Media Conference. He indicated the company expects smartphone penetration, currently at around 40%, to eventually reach around 70% of Verizon Wireless customers. 

In addition, with the introduction of more services, including video, for mobile devices, he believes tablet use will also grow significantly. As those things happen, he sees shared data plans as both a convenience for the customer and a cost saving measure for the company.

In the interview he said:

I think in 2012 we’ll see it. We’ve been working on this for a couple of years frankly… because we see four screens or even five screens. If you look at all the machine to machine capabilities that are out there, customers don’t want – and neither do we by the way – want an individual account for each one of those devices. It drives them crazy and would raise our costs a lot so getting to one bill and having account level pricing is the way to go.

This is definitely a step in the right direction, but keep in mind there was no mention of lowering prices with this consolidation. The reality is, even if you are only using a small portion of your data plan now, as applications for mobile devices increases, so will the data usage.

Where this potentially becomes useful later is to provide consumers with a clearer picture of just how much they are really spending for data. It’s one thing to look at your bill and see that you are paying $30 for one device, which is the current Verizon rate for 2GB per month.

It’s something else to look at a combined rate which includes multiple devices and realize you’re paying significantly more for mobile data than for your home Internet connection. If McAdam truly wants customers to utilize services like streaming video, current pricing is simply too high a barrier to overcome for most people.



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