Verizon Raising Rates: Taking Advantage of Locked-In User Base?

Noting that the average customer's data consumption has nearly tripled over the past three years, Verizon Wireless today announced it is changing its wireless plan offerings, increasing both data caps and prices. Beginning tomorrow, monthly costs for the company's five plans are going up by $5 to $10, with data caps increasing by 1 GB to 6 GB per month.

The company is also rolling out a new "My Verizon" app that it said will give customers more control over their service usage and costs. The app features a "Safety Mode" that lets users choose to slow down their data speeds once they've reached their monthly caps so they don't incur any overage charges.

Customers can also add more data to any plan for $15 per GB, or carry over unused data from one month into the next. Carry-over data will expire at the end of the following month's billing cycle.

Changing U.S. Cellphone Habits

The price and service changes are signs of the evolving mobile service market, which has recently seen customers holding onto their cellphones longer and changing their service plans less frequently, according to several studies.

In April, for example, research by Citigroup showed that average cellphone replacement times in the U.S. were expected to reach 29 months in the first half of this year, compared to an average of 24 to 26 months two years earlier.

A June survey of U.S. smartphone owners by the marketing firm Fluent pointed to a similar trend, finding that more than two out of five respondents (42 percent) didn't expect to replace their current phones for three or more years. The current lull in smartphone upgrades might also be due, in part, to people waiting until the new iPhones are released this fall, according to a report in today's Wall Street Journal.


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