(By Karl Denninger) In response to Sprint sticking a white-hot poker up Verizon and AT&T's backside with their decision to sell the iPhone on their Virgin Mobile service, Verizon has decided to screw you even harder!
The monthly data allowances start at one gigabyte for $50 a month and range up to eight gigabytes for $90 a month. There will be no fee or contract extension for current subscribers to move to the new plans.
Yeah, that's a good deal..... uh wait!
Oh, there is a $10/line cost too.
This is clearly a move in response to Virgin's "unlimited everything" $55/month deal. But for those who don't need unlimited voice minutes Virgin's cost is $35/month per line for unlimited text and data, plus 300 voice minutes, or $45 for 1200 voice minutes.
So is Verizon "better"? That depends. For one gigabyte it may not be all that bad, but at $10/gig for each additional gigabyte it adds up fast. Under certain circumstances (such as a family with a bunch of devices) it may make sense, but for a single person it almost-certainly does not.
Oh, and here's the real "screw you" job -- all the ads that every Android and iPhone app likes to spam you with? You pay for them since they count against your data allowance.
Isn't that special? You're being charged to be sent advertising -- with no "opt out."
Someone needs to think about the legal ramifications of such a "force-feed" model, I suspect, given that it's pretty much a contract of adhesion with no means to avoid it, especially when going over means getting charged extra.
I still like my $45 unlimited voice, text and 5gb data with T-Mobile and think I'll keep it, but if I didn't qualify for that I'd still be on Virgin's $55 service.
PS: I'd be watching Verizon and AT&T's margins -- this sort of pricing response means they're feeling the heat, and fast -- which in turn means they may have some profit problems in quarters to come.
Disclosure: The author has a speculative position in Sprint, but no position in Verizon or AT&T.