Verizon to Cap Data Plans on July 7

Verizon to Cap Data Plans on July 7

Verizon is switching to tiered data plans on July 7, forcing customers to choose how much they’re willing to spend for web access on the go.

The Basking Ridge, N.J.-based carrier will stop offering the option for unlimited data and, instead, offer three capped plans: 2-gigabytes for $30 a month, 5-gigabytes for $50 and 10-gigabytes for $80. Existing subscribers with unlimited data plans will be grandfathered in.

Users who go over the allotted amount of data will pay a fee of $10 per gigabyte. Prices will be the same for 4G and 3G service.

Until now, Verizon had offered unlimited data to customers as a more attractive option to lure customers from AT&T, which capped its data plans last year.

Verizon’s move, after the release of the iPhone 4, is partly due to rising bandwidth costs from data-hungry subscribe, making the switch to tiered plans inevitable.

In February, Verizon added a clause to its contracts, giving it the right slow down data service for customers who consumed the most bandwidth. After drawing criticism for the move, Verizon went back to the drawing board to revamp its data plans.

In March, the company explored a tier-based system, aiming to have it in place before the release of the iPhone 5.

Lighter data users, who already pay $30 a month for unlimited data, won’t likely incur additional costs, since the 2-gigabyte plan is roughly the same price. Heavier users, on the other hand, will be hit the hardest, since the highest data plan is priced $50 more a month for service.

The new caps and prices may force users to think twice before they pick up their cell phone to download a new app or download large e-mail attachments.

A recent Nielsen study revealed that smartphone data use skyrocketed among consumers, giving carriers a lucrative new stream of revenue.

With Verizon and AT&T both switching to tiered data, T-Mobile and Sprint are the only carriers left offering unlimited data. Should AT&T’s merger with T-Mobile goes through, competition may force Sprint to follow suit as well, making unlimited data a thing of the past.

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