Verizon opts to keep unlimited data plan in its first LTE phone

Computerworld - The HTC ThunderBolt will arrive Thursday with an unlimited data plan for $29.99 per month, keeping the first LTE smartphone from Verizon Wireless in line with unlimited data plans for Verizon's current 3G smartphones, including the iPhone 4.

Many analysts had expected otherwise and said the carrier would use ThunderBolt as a way to end unlimited data plans, although that step could still occur in a future Verizon announcement.

Verizon spokeswoman Brenda Raney on Tuesday repeated earlier statements that the company "will move to some type of usage-based pricing this year. The unlimited smartphone plan in the [ThunderBolt] announcement this morning is all we are announcing right now."

In an interview, Raney said usage-based pricing doesn't automatically mean that there will be an upper-end cap with overage charges, as its competitor AT&T has implemented. AT&T has two smartphone data plans: 200MB for $15 per month (and $15 more for 200MB in overages), and 2GB for $25 per month (with $10 more for an additional 1GB of overages).

Asked if usage-based pricing means that there will be an upper cap, Raney said, "Not necessarily, but I have no idea of the pricing model."

Verizon CFO Fran Shammo told investors on March 1 that tiered pricing would be coming from Verizon, probably by midsummer, adding, "We will be launching the HTC ThunderBolt very shortly here, and then that will give you a flavor of our tiered-pricing structure going forward."

If the unlimited data plan in the ThunderBolt announcement truly represents a "flavor" of tiered pricing as Shammo hinted, then perhaps Verizon will continue unlimited data plans for some time. But that seems unlikely, given his other comments.

Shammo also told investors on March 1 that the unlimited $29.99 option would remain in place for the iPhone 4 and other 3G smartphones for the time being to avoid putting up a barrier to new customers, but he added that "that was never a long-term strategy."

Continuing unlimited data plans at any carrier seems unlikely, analysts have said, because of the explosion of data from video on smartphones, which is expected to worsen with LTE speeds and faster smartphones, many with dual cameras.

"Everyone knows unlimited data on wireless networks is unsustainable," said Jack Gold, an analyst at J.Gold Associates, reacting to Shammo's speech.

If the unlimited data plan for the ThunderBolt stays in place for a while, unlimited plans could also apply to three other LTE smartphones coming from Verizon: the LG Revolution, the Droid Bionic 4G and the Samsung 4G LTE.

Verizon said in its announcement that the ThunderBolt comes with a voice plan that starts at $39.99 per month in addition to the $29.99 unlimited data plan. However, there are other options for data on the ThunderBolt that are not easy to find on Verizon's Web site, including an unlimited data plan for corporate customers that costs $44.99 per month and provides service for several e-mail accounts behind a firewall.

Raney also said that if a customer wants to use the ThunderBolt solely for data, the device must be purchased unlocked with a data service plan of $49.99 a month for 5GB. Various sources have put the unlocked price of the ThunderBolt at $669.99. Verizon sells the Android 2.2 ThunderBolt with a 4.3-in. screen for $249.99 with a two-year service agreement, although online retailer Wirefly is charging $199.99 with a two-year agreement.

Also, Verizon customers on a data plan that costs $15 for 150MB per month can move that plan to the ThunderBolt, although that plan is no longer offered to new customers, Raney said.

Verizon has taken a different approach to data costs for tablet devices such as the iPad 2 and Motorola Xoom, offering four tiers of service that start at $20 per month for 1GB and top out at $80 for 10GB. Tablets do not require a long-term service agreement. Overage charges on the tablet plans start at $20 for 1GB on the entry-level plan, but the other three plans charge $10 for 1GB of overage.

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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