Verizon LTE pricing to factor in transfer speeds?

By Geoff Duncan November 18, 2010

Verizon Wireless is getting ready to launch LTE-based 4G service in selected metropolitan markets, which means the company is also considering how to charge customers for accessing the service. A report in the Wall Street Journal (subscription required) the company is considering charging customers based not only on how much data they consume in a billing cycle—like metered mobile data plans today—but also based on how quickly customers receive that data. In other words, the faster a customer’s LTE connection, the more they would pay.

Verizon Wireless has not yet committed to any pricing plan structure for LTE services, although it will need to do so soon: the company plans to roll out LTE service in more than three dozen markets by the end of 2010. However, industry watchers don’t expect Verizon Wireless to unveil any LTE handsets before January’s Consumer Electronics Show in Las Vegas, with the first handsets perhaps reaching consumers in February.

In the Wall Street Journal story, Verizon Wireless CFO Fran Shammo indicated 4G customers may have an option between service plans that offer higher data caps at lower bandwidths, or lower data caps at high bandwidth. Shammo did not indicate any possible pricing points for service, or whether both high bandwidth and high-capped packages would be available. However, the company also didn’t rule out offering unlimited packages.

Pricing structures based on available bandwidth would bring LTE mobile broadband pricing into the same arenas as some hardwired Internet services, some of which charge different rates based on maximum available bandwidth. Although it’s not common for those services to also have a data cap per billing cycle, many ISPS will throttle or shut down service for users they believe to be abusing available bandwidth.

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