Verizon to Cap Data Plans Before IPhone 5 Launch

Verizon to Cap Data Plans Before IPhone 5 Launch

Verizon will stop offering unlimited data plans and shift to a tiered pricing structure this summer, a top executive said, in a move to keep from overloading its network before a new iPhone is released around June.

The Basking Ridge, N.J.-based carrier is exploring ways to charge their customers based on the amount of data they use, the source said. The company, which began selling the iPhone in February, currently offers a $30 unlimited data plan for the device.

“We didn’t want to put up a barrier to anybody who wanted to come over and experience our network,” said Fran Shammom, Verizon’s chief financial officer. “But that was never a long-term strategy.”

Verizon had said the unlimited plan was temporary. In addition, it said it could throttle the download speeds for its heaviest data-consuming customers, in regions where they risk slowing down its network.

“There could be some lumpiness when you launch the phone,” Shammo said. “If there happens to be a new iPhone that comes out, that quarter might not look so good.”

Shammo hinted at, but didn’t disclose, details about a new iPhone. Apple historically unveils new models in June, which would coincide with Verizon’s rollout of the new tiered plans. Analysts are predicting a third-quarter launch of an iPhone 5 for Verizon.

To date, Verizon has sold 60 percent of its iPhones online, rather than in stores, prompting CEO Daniel Mead to publicly counter reports that device sales were lower than expected. Later this month, it plans to double the number of smaller retailers and other storefronts that sell the iPhone, from 4,000 to 8,000.

“We have a very big opportunity because 67 percent of our customers are either feature phones or multimedia phones,” he added. “We see the potential of our customer base spending in that $30 to $50 range.”

Analysts expect the carrier to ship 9 million to 13 million units this year. Mead confirmed that it was on track to sell as many as 11 million iPhones in 2011.

Last year, rival AT&T capped its unlimited data plans, except for customers already under contract. It now provides 200-megabytes for $15 a month, or 2-gigabytes for $25.

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