Data Shows VZW's Costs for Transmitting Data are Going Down as Customers Pay More

[dgstorm]

As most (if not all) of you are aware, Verizon has been slowly altering their data plans over the past couple of years. They have been eliminating old ones and are introducing new ones that rarely benefit the customer, but instead benefit Verizon's profit margins. Apparently, that difference may be more pronounced than we thought. According to a minor analysis of Verizon's most recent earnings call, Verizon's costs associated with delivering data continue to go down, even as they are increasing costs to most of their customers. Here's a quote with some of the details,

As [The New York Times’ BrianX] Chen noted, Verizon’s average monthly revenue per wireless account grew 6.6% to $146.80 in the holiday quarter. The main reason for the growth is simple: 23% of Verizon’s wireless accounts are now subscribed to Share Everything plans.

The beauty of Verizon’s new plans, as the report points out, is that data is getting cheaper for Verizon to transmit even though the carrier is charging more for it. “The company says the 4G LTE network is five times more efficient than its predecessor, 3G,” Chen wrote. ”That means the more people who buy devices that connect to the newer network, like the iPhone 5, the more money the company will eventually gain.”

As an added bonus, Chen noted that Verizon’s faster data networks also cause users to eat through their data allowances more quickly. This eventually prompts them to buy more expensive plans with higher data caps, which of course net Verizon even more cash. ~ BGR

Now, of course we don't fault a company for trying to earn a profit. After-all it would be silly to operate a business that does not generate profit. That would be a charity. Also, between heavy pension costs and Hurricane Sandy repairs, Verizon actually took a loss last year. Still, sometimes it's hard not to think that Big Red is taking advantage a little bit, especially because they claim that their data plans are designed to minimize network clogging. That has always seemed like a lame excuse, and is even more so, realizing that their 4G network is 5 times more efficient than their 3G network.

There comes a point when "min-maxing" just seems shady. Also, perhaps it would be an easier pill to swallow if VZW didn't shovel "horse-crap" excuses along with their policies. Share your perspective.

 

[Raverrevolution]

Too bad they couldn't just be good guys about things. They are such a force when it comes to cell phone service and they seem to just be a bully about it all.

I really hope Google does start up a cell service, people jump ship, and Verizon gets some AOL style karma back.

 

[GotnFX]

Too bad they couldn't just be good guys about things. They are such a force when it comes to cell phone service and they seem to just be a bully about it all.

I really hope Google does start up a cell service, people jump ship, and Verizon gets some AOL style karma back.

Totally agree with you on Google...however it has to be just as good if not better service otherwise it will just be another att or sprint

 

[Crankintopwater69]

Why am I not surprised:angry:

 

[NeoPhoenixTE]

...and this is why I won't be renewing my contract in two years and just sit on month to month grandfathered in to my unlimited plan.

 

[Raverrevolution]

Totally agree with you on Google...however it has to be just as good if not better service otherwise it will just be another att or sprint

I would totally take that chance if it came up regardless. I couldn't see Google stagnate too much without innovation if they did have their own service.

Verizon on the other hand is just all about the $$$. As long as they stay one step faster than the next guy they have somewhat of a monopoly and they could care less about your dissatisfaction.

 

[Raverrevolution]

...and this is why I won't be renewing my contract in two years and just sit on month to month grandfathered in to my unlimited plan.

I'm on the same exact boat as you.

 

[jseah]

I would totally take that chance if it came up regardless. I couldn't see Google stagnate too much without innovation if they did have their own service.

Verizon on the other hand is just all about the $$$. As long as they stay one step faster than the next guy they have somewhat of a monopoly and they could care less about your dissatisfaction.

Google would have to become a MVNO. Building a cellular network from scratch is just too cost prohibitive....besides, where would they get the spectrum from?

 

[ChevyNexus]

See what I think is that if Google started up its own cellular service people would switch just on the namesake alone. Google is a big enough juggernaut that I think its name alone when put on something sells it. Of course that's just my opinion.

Sent from my Galaxy Nexus using Tapatalk 2

 

[benb1974]

If Google started some 2.5 g service I would switch.

 

[combatmedic870]

If Google started some 2.5 g service I would switch.

If google where to build like 300 towers in major cities where they sold 5G(not VOLTE, but 5G like they are making in korea, 1gb per second), they would be 2 steps ahead of verizon.

 

[sNuFfYStiGLiTZ]

...and this is why I won't be renewing my contract in two years and just sit on month to month grandfathered in to my unlimited plan.

Until they eventually kill of unlimited. It's going to happen lol

 

[Kryptyk]

I guess I see it as it is a "choice" to have a phone with data. It is not a "need". We keep blaming them for overcharging or taking it to us, which I do agree as well that they are, but we choose to keep paying these inflated prices. There are other choices, that are cheaper but may have less of a service area or reliablity, but indeed there are other options.

I don't agree with the charges, believe me I don't like my $200+ dollar bill a month, but it is a choice to pay that amount. There are other ways to get email and other devices that support our needs such as GPS and stuff. Again, it is a choice. Sad but true.

 

[kodiak799]

Just because the cost of transmission (i.e. marginal or variable cost) is decreasing says nothing about the fully loaded cost (including investment) to provide service.

 

[comk4ver]

Just because the cost of transmission (i.e. marginal or variable cost) is decreasing says nothing about the fully loaded cost (including investment) to provide service.

I refuse to believe that it takes more than two years to recoup investment cost. Does anyone know the cost of for the building our 4G network? Verizon has a surplus of money in their bank; unless they are starting the building of the 5G network (which I doubt considering they are just finishing up the 4G). Then next year should be the end of cost. Will Verizon stop charging exorbitant prices? No, after all no one is against a company making money there's an issue of just hoarding money and giving nothing back. I am not talking about giving money back but giving better services such as lowering cost or more options for services?