Verizon iPhone data plans could hit $120 a month

Computerworld - Verizon Wireless hasn't announced the price of its monthly iPhone data plan, igniting speculation that the company plans to charge up to $120 monthly for unlimited data on top of voice and texting costs.

"Data plans for Verizon iPhone could range from $20 to $90 a month or even $120 unlimited a month," said Rob Enderle, an analyst at Enderle Group. "The iPhone uses an awful lot of data, so they will have to charge heavily for data and it will be fairly expensive."

Other analysts said it would be unwise for Verizon to charge so much, especially if the costs for monthly data for the iPhone is different from other smartphones running Android or other OSes.

"My general assumption is that monthly pricing will remain on par with other smartphones Verizon sells," said Dan Hays, a consultant at PRTM. "Verizon would be hard-pressed to justify a pricing difference between one smartphone in its portfolio and another and they have consistently moved to align pricing across different manufacturers."

Still, Verizon has released an FAQ that says customers will need to pick an existing Nationwide voice plan for two years and adds: "Customers will be required to activate a data package; pricing will be announced at a later date."

A Verizon spokesman, asked to clarify, said the iPhone service plans have not been announced, adding to growing concerns over what the prices will be.

The fact that "a later date" is mentioned in the FAQ suggests to some analysts that prices will probably go up, perhaps for all smartphones on Verizon.

Today, Verizon advertises data plans costing $15 a month for 150 MB of data on 3G smartphones, or $29.99 for unlimited data. Separately, Verizon charges for text and voice. The top fee for texting covers 5,000 texts or unlimited mobile to mobile for $20 a month; the top unlimited voice plan is $69.99. Texting plans start at 20 cents per text; voice plans start at $39.99 a month for 450 minutes.

As an example, if Verizon were to charge $120 for data on top of the highest monthly fees for texting and voice, a monthly bill would hit $330, up from $220 now. None of those prices include taxes and fees.

The concern about monthly pricing focuses mainly on data, which is made more complex because Verizon and Apple announced the Verizon iPhone will support up to five Wi-Fi devices as a Wi-Fi hotspot.

Other devices and smartphones offering similar Wi-Fi access at Verizon are charged $20 a month.

With the current charges for hotspot functionality and unlimited data plans on 3G phones, some analysts predicted that Verizon could come up with a scheme to combine both functions. They suggested the minimum data price for both features would be about $50.

Jack Gold, an analyst at J. Gold Associates, said that whatever Verizon charges for Personal Hotspot capabilities will be tied to the cost of the iPhone data plan, even if the two are separate charges on a bill.

"The amount for [a Personal Hotspot] will depend upon the cost for a data plan," Gold said, noting that some users will never set up a Wi-Fi spot for more than one other device and would not want to pay for five.

With five devices over Wi-Fi on an iPhone, actual data usage could soar, analysts noted, something that Verizon has certainly considered.

"Verizon may decide to announce a $120 monthly unlimited data plan for iPhone [including the Personal Hotspot function] and see how much data is used and then throttle back later," Enderle said. He noted that AT&T had an unlimited plan, but imposed caps last year.

AT&T now charges $25 a month for 2GB for smartphone data plans, and $10 for each 1GB over that amount. When Verizon launched the Galaxy Tab last year, it created five data plans that topped out at $80 a month for 10GB, with $10 for each added 1GB. That approach could be employed by Verizon for smartphones, including the iPhone, as well, some analysts suggested.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at  @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

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