The new Verizon Wireless “Share Everything Plans,” providing a single bucket of data usage in the same way that many consumers already purchase voice and texting services on family plans, illustrates one advantage mobile service providers have when competing with over the top application providers.

In essence, Verizon Wireless has created, for many of its customers, a basic bundle of value that includes the device, plus unlimited domestic texting and voice. And if you assume most people simply must have mobile phone service, Verizon Wireless now has made voice and texting essentially “free.”

In other words, basic mobile service now bundles voice and texting as part of the basic access. . Mobile data now becomes the variable-cost item. Verizon Wireless continues to earn revenue from its voice and text messaging services, but as a flat fee charge for using the network.

Advertisement

To the extent that over the top messaging and voice apps have value because they reduce spending on voice and text messaging, the new “Share Everything” plan undercuts that value proposition. For Verizon Wireless customers on the shared plans, there is no incremental cost to talk or text (domestically).

In principle, that is what some fixed network service providers also have done. The difference is that most people “need” mobile service in a way that might not be so true for fixed network service.

So, aside from the other impact the new plans might have, they also illustrate one way a mobile service provider can create value offsetting the attraction of over the top voice and messaging. Though international calling remains an area where price arbitrage still has value, people who mostly call and text domestically now will find OTT voice and messaging of less value.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!