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Mobile Carriers Charging Differently, but Still Finding Plenty of Ways to Make Money

Verizon has led the shift away from unlimited data.


A few years ago, cellular companies charged for each call their customers made and gave most of them unlimited data.

As data use exploded and voice calling and texting began to wane, carriers effectively flipped their business model, with most people now getting unlimited calling and texting and paying for the size of data plans they want.

That transition in the U.S. is now largely complete, with the industry having managed to keep its profits high, while changing the way it does business.

A new study from Consumer Intelligence Research Partners finds Verizon has navigated that shift best, with the fewest customers still on unlimited data as well as the largest share of consumers paying more than $100 per month.

“Verizon has succeeded in getting the most out of its smartphone customers,” CIRP partner Josh Lowitz said in a statement. “Not only do more of their customers use Verizon data on additional devices, with limited data plans, their customers also pay for their actual data usage.”

Some 51 percent of Verizon customers play more than $100 per month, including 14 percent that pay upward of $200 per month, according to a survey of about 500 U.S. customers who activated new or used phones between April and June. The same survey found that just 22 percent of Verizon customers have an unlimited data plan, compared with 44 percent for AT&T and 78 percent for both Sprint and T-Mobile.

AT&T and Verizon have been moving away from unlimited data plans, especially for core smartphone customers. AT&T, for example said that, as of the first quarter of this year, about 81 percent of postpaid smartphone subscribers were on some type of usage-based data plan.

Verizon, which reports earnings on Tuesday, has already indicated it had a strong second quarter.

CEO Lowell McAdam said at the recent Sun Valley, Idaho conference that Verizon Wireless expects to report an addition of more than 1.4 million retail postpaid customers with limited churn and profit margins consistent with the last few quarters.

AT&T and Verizon have both been actively pushing customers toward metered data plans, including those that let customers pool data across multiple devices, such as tablets and hotspots. As of last quarter, Verizon said more than half its customers were on shared data plans.

Industry analyst Chetan Sharma noted in a report earlier this year that data now accounts for more than half of revenue for U.S. carriers.

The other big trend has been a move, led by T-Mobile, to separate the cost of the phone from monthly service. Doing so has paved the way for business models that allow customers to upgrade their phones more frequently.

Here’s a look at the average monthly bill, according to the CIRP study:

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