Verizon’s plans to eliminate unlimited use plans should accelerate the federal government’s push to leverage Uncle Sam’s buying power to get lower prices and enhanced services from the carriers and the device manufacturers, a federal IT marketplace expert said Friday.
According to a CNET report, Verizon Wireless officials on Thursday clarified plans to discontinue unlimited data plans, saying customers could keep their existing unlimited data plans if they keep their existing device or buy a new device at the full retail cost of the smartphone. In other words, the report states, if a customer renews a contract and purchases a subsidized phone, they would lose the option to keep the unlimited plan.
The clarification came after Verizon Communications chief financial officer Fran Shammo reportedly told investors during an interview at a JP Morgan conference that the company plans to force many of its existing unlimited data customers to a tiered offering. Verizon Wireless discontinued unlimited data plan for new subscribers last July, but allowed existing smartphone users to keep their $30 a month unlimited data even when they upgraded to new devices and a new contract.
Warren Suss, President of Suss Consulting, Inc. and a nationally recognized expert in the federal government information technology marketplace, said the news could mean cost savings in the federal mobile marketplace.
“Many agencies purchase mobile services and devices on the “open market”, which means they’re not getting a better deal than an individual consumer,” he wrote in an email to Breaking Gov. He added: “Unless the government moves more aggressively to aggregate demand and enforce centralized buying and management of mobile services and devices, their prices will be driven up as the industry does away with unlimited usage plans.”
He also said the government is working on new acquisition vehicles, under the leadership of GSA and OMB, on a program called the Federal Strategic Sourcing Initiative (FSSI), to get more bang for their buck in the marketplace for mobile services and devices.
If the government can aggregate their demand for mobile services and devices, he said, they can get very good deals, including unlimited usage plans, special features (e.g. the ability to remotely erase and disable a lost or stolen phone), invoices that address government-unique mandates, and 800 numbers for rapid-response help desk support.
Verizon is not alone in trying to move away from a pricing structure that predates the evolution of towards consumers owning multiple devices.
Ralph de la Vega, the head of AT&T‘s mobile business, also described plans this week that involved changing its pricing structure and reducing the amount of subsidies it offers on the mobile phones it sells, according to a Reuters report.
AT&T customers currently must subscribe to separate data plans for every wireless device, including tablets, that they want to connect to its network. Most tablet users sidestep mobile data plans using Wi-Fi connections instead to avoid signing up for a second data plan.
“What we need to be able to do,” said de la Vega in the Reuters report, “is to allow customers to connect those tablets to some of the existing data plans that they have to be able to share them in a way that will drive more revenue for us, but also give a good deal to customers.”
Breaking Gov Editorial Director Wyatt Kash contributed to this report.