Verizon CFO Says Customers Don’t Need Unlimited Data, Data Hogs Ruin Experience For Everyone
Unlimited data plans have seen a slight resurgence among some of America’s wireless companies. AT&T resurrected unlimited data for customers that bundle in its DirecTV or U-Verse TV packages. T-Mobile and Sprint also offer unlimited plans for its customers. However, AT&T, T-Mobile, and Sprint all have numerous restrictions in place, including throttling customers after 22GB, 26GB, and 23GB respectively have been consumed during a billing cycle.
Even with the caveats, these “unlimited” plans are likely welcome to customers that use large amounts of data per month. However, if you’re a Verizon Wireless customer, don’t expect to see its deceased unlimited plan rise from the dead. Speaking this week at an investor conference, outspoken Verizon Chief Financial Officer (CFO) Fran Shammo stated, "At the end of the day, people don't need unlimited plans.”
For Verizon, and especially coming from the company’s CFO, it all comes down to cold hard cash. "You cannot make money on an unlimited video world," said Shammo. He also specifically called out “data hogs” that he says tend to gravitate to the all-you-can eat unlimited plans. These elite few spoil the experience for everyone and "tend to be abusive” by overloading wireless networks according to Shammo.
Shammo went on to say that Verizon’s wireless plans are customer friendly, and don’t come with asterisks attached with regards to services (i.e. T-Mobile excluding HD video without an extra tacked on fee, and reduced tethering speeds).
As far as it goes with respect to countering promotions from its competitors, Shammo says that Verizon would “respond when needed."
Shammo’s comments should come as a surprise to anyone that follows the wireless industry. In January, he started that his company wouldn’t offer rollover data like T-Mobile and AT&T because “We’re a leader, not a follower” and added "We did not go to places where we did not financially want to go to save a customer.” In March, he was at it again calling unlimited data a short-term game, proclaiming, "I've been pretty public saying the unlimited model does not work in an LTE environment.
"Eventually unlimited is going to go away because you have to generate cash to reinvest."