Verizon hikes data fees in pricing revamp

By Sinead Carew

NEW YORK (Reuters) - Verizon Wireless is undertaking a massive overhaul of its prices by raising fees for data services like mobile web surfing while offering unlimited calls and texts, as it aims to increase data revenue and protect its older business lines.

The biggest U.S. mobile operator is also letting customers use their data allowance for multiple devices in the hope of enticing them to connect more gadgets, like tablet computers to its network with the new plans as customers will now be able to avoid paying for separate data subscriptions for each device.

While the new plans, available June 28, should boost Verizon Wireless revenue over time, many of its existing customers may be hesitant about adopting the new service plans, analysts said.

"It looks like it's good for people who are real heavy voice and messaging users," said Pacific Crest analyst Steve Clement. "For folks who don't care about voice and messaging, I don't think the plans are that good because they force you to pay a bit more for unlimited quantities of something you don't want."

For a customer with one smartphone who does not currently pay for unlimited calling, they would have to pay $10 a month more under the new plan, for a package with the same amount of data, increasing their fee to $100 a month. But a family with two smartphones that already pays for unlimited phone calls would save $60 a month, bringing their fee down to $150.

While the venture of Verizon Communications and Vodafone Group Plc had signaled for about a year that it would develop shared data plans, it had not given any details of the pricing overhaul until Tuesday.

Sanford C. Bernstein & Co analyst Craig Moffett described the Verizon revamp as "the most profound change to pricing the telecom industry has seen in 20 years." Verizon Wireless is the first U.S. carrier to sell data service plans for multiple devices. Analysts expect the entire industry to eventually follow suit.

But, others including consumer advocacy groups said the operator should go back to the drawing board if it is to appeal to consumers.