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Verizon CFO: 'Unlimited' data is just a word

Customers might reply that so is 'cancellation'

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Verizon Chief Financial Officer Fran Shammo has told analysts that "unlimited" when used to describe data is "just a word" and the idea of an open pipe is heading to extinction.

"What customers are understanding and through our good sales routine is once you explain to a customer their usage on a monthly basis, unlimited is just a word, it doesn't really mean anything and that people don't really - I think a lot of consumers think they consume a lot more data than they really do.

"So that whole unlimited thing I think is going by the wayside and they see the benefit of going to the shared," he said at the Goldman Sachs Communacopia Conference on Thursday, 20 September.

According to Shammo, many customers are jettisoning unlimited plans in favor of shared data service for multiple devices. Demand for the shared plan was much stronger than the company had expected. And, once on the limited data plans, they are attaching a lot of devices to use the service, he said.

Shammo's comments could be construed as disingenuous. El Reg popped down to our local Verizon store in San Francisco and was told that customers who upgraded to the iPhone 5, or any new handset, automatically lost any existing unlimited data plan. That doesn't sound like much of a "choice".

Shared plans

Shifting users onto the shared plan is critical for Verizon, Shammo told the Goldman Sachs conference, because "the more data they consume the more they will have to buy up in bundles."

The more devices users could be encouraged to connect under the plan then "I get incremental dollars for each device that's attached and that is really what drives the future revenue growth."

Verizon is already planning a mobile video service later in the year, according to recent reports, and this will further increase data usage. If Verizon can dump unlimited data customers then the profits from such a service will only rise.

Verizon and AT&T, the two largest US mobile network operators, still offer unlimited data for a few customers, albeit heavily throttled if certain data limits are reached.

By contrast, Sprint still offers an unlimited option and T-Mobile recently announced it will be selling a true unlimited data service.

Verizon has been busy over the last few years buying up spectrum allocations in the US, notably the $3.6bn acquisition of SpectrumCo's allocation, and Shammo reported that the company now has enough spectrum for at least the next four years.

The company is looking out for more when the government finally gets approval from Congress to set up auctions, he confirmed. ®

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