Verizon's "Screw Everyone" Plan
The Market Ticker ® - Commentary on The Capital Markets
Posted 2012-06-12 10:31
by Karl Denninger
in Technology
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Verizon's "Screw Everyone" Plan
 

In response to Sprint sticking a white-hot poker up Verizon and AT&T's backside with their decision to sell the iPhone on prepaid Virgin Mobile service, Verizon has decided to screw you even harder!

The monthly data allowances start at one gigabyte for $50 a month and range up to eight gigabytes for $90 a month. There will be no fee or contract extension for current subscribers to move to the new plans.

smiley

Yeah, that's a good deal..... uh wait!

Oh, there is a $10/line cost too.

This is clearly a move in response to Virgin's "unlimited everything" $55/month deal.  But for those who don't need unlimited voice minutes Virgin's cost is $35/month per line for unlimited text and data, plus 300 voice minutes, or $45 for 1200 voice minutes.

So is Verizon "better"?  That depends.  For one gigabyte it may not be all that bad, but at $10/gig for each additional gigabyte it adds up fast.  Under certain circumstances (such as a family with a bunch of devices) it may make sense, but for a single person it almost-certainly does not.

Oh, and here's the real "screw you" job -- all the ads that every Android and iPhone app likes to spam you with?  You pay for them since they count against your data allowance.

Isn't that special?  You're being charged to be sent advertising -- with no "opt out."

Someone needs to think about the legal ramifications of such a "force-feed" model, I suspect, given that it's pretty much a contract of adhesion with no means to avoid it, especially when going over means getting charged extra.

For me? 

I still like my $45 unlimited voice, text and 5gb data with T-Mobile and think I'll keep it, but if I didn't qualify for that I'd still be on Virgin's $55 service.

PS: I'd be watching Verizon and AT&T's margins -- this sort of pricing response means they're feeling the heat, and fast -- which in turn means they may have some profit problems in quarters to come.

Disclosure: The author has a speculative position in Sprint, but no position in Verizon or AT&T.

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User Info Verizon's "Screw Everyone" Plan in forum [Market-Ticker]
Musicandnature
Posts: 2001
Incept: 2007-12-05
Gold
NJ
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Oh and the other day Captain Booyah was bullish on V and T "they will not miss when others will"

I 'tink I tee some leapin 'put'ty tats looking to get some bacon from these piggies.

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Since it costs a lot to win, and even more to lose, You and me bound to spend some time wonder'n what to choose. Goes to show, you don't ever know, watch each card you play and play it slow...Wait until that deal come round, don't you let that deal go down, no no. Garcia/Hunter.
Jstanley01
Posts: 8260
Incept: 2008-07-30
Silver A True American Patriot!
San Antonio, Texas
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I bet I could screw my whole family, and friends too.

"Come on everybody, bend over! Let's get screwed! After all, we ain't payin' our mortgages anyways..."

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You can't cheat an honest man. ~P.T. Barnum
Winstonsmith2009
Posts: 1061
Incept: 2009-08-05

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I've got a "dumb phone" with data service turned off. There was an app on the phone that was on by default which at least once daily would cause the phone's backlit LCD to activate for its default on-time and display some kind of ad. It wasn't costing me anything, but it was wasting my battery life, so I searched on-line and thankfully found the instructions on how to turn it OFF.

If the ads on the Android and iPhone can't be turned off, that would be an unacceptable situation to me.
Genesis
Posts: 131401
Incept: 2007-06-26
Admin A True American Patriot!
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They cannot be turned off except by rooting the phone (which the carriers claim will void the warranty) and inserting a dummy HOSTS file or similar (to cause the attempts to feed ads to fail.)

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Ben
Posts: 6402
Incept: 2009-10-09
Silver
The Distant, Glorious, Past
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I have two SIMS.

One costs me $8 a month the other costs me $1.50.

The $8 is when I 'go crazy' and surf the Internet 3G and make long distance international calls.

No plan though you can get one but it costs more long run to get that phone
'for free' and pay 18 yuan a month. Of course.

Cash each month. Buy the phone of your choice, slap the SIMS in (most phones have slots for 2) and go.

.jars can be d/l'ed and added, and I can make cheap VoIP calls using a selection of 3 to 5 gateways, at any one time.

It's about 1/12th of the cost of a us plan, and that multiple is approximately what many items cost less here.

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"Why are you going to learn French?"
"Because I'm going to France," says Joe.
"I'm from the future. You should go to China."
Bigbluffer
Posts: 1330
Incept: 2010-11-01
Green
NC
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Thanks for the newsflash. Guess I'll be keeping my contract with Verizon and paying retail for any new phones. I'm getting 450 phone/250 text/unlimited data on my BB for $75. I don't use it to talk much anymore, and never use all my text (most everyone I know has a smart phones so gets email on phone if I'm worried about usage).
Debtpie
Posts: 534
Incept: 2009-12-17

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The sooner AT&T folds up, the sooner I'll have a big smile.

Everything they touch turns to brown stuff...so glad they didn't get T-Mobile.

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A Leader, or an Opportunist? "A leader has the capacity of vision, the ability to see where things are headed before people in general see those things." Mitt Romney --- DebtPie's definition: a leader decides where "things" should head and "leads" us there.
Degaston
Posts: 2264
Incept: 2007-07-27
Green
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I hope for your own sake Gen that you have some disclaimer somewhere saying that you can change your positions on any securities at anytime without warning to anyone who reads your blogs.

Now as far as telecomm costs go I think that in the long run we're going to see the people needing large capacity during peak times being the ones charged the big bucks to pay for the infrastructure upgrades. Anyone willing to accept a lower tier level of bandwidth, network reliability, and timeslots along with using "no service/support necessary" devices/services (i.e. the types of devices/services that don't generate support phone calls or if they do then you agree to be called back when its convenient for the telecomm carrier) will basically get pretty cheap telecomm connectivity.

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3/17/2013: Bullish on nothing - 100 percent in cash.
Andyk1
Posts: 30
Incept: 2008-09-29
Green A True American Patriot!
Kenosha, Wisconsin
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I received this email from Virginmobile (my provider) today:

Starting Friday, June 29, 2012, the iPhone 4 and iPhone 4S will be available on Virgin Mobile Beyond Talk unlimited data and messaging plans. Plus, get an exclusive $5 per month plan discount when you register a credit card, debit card, or PayPal account for automatic monthly payments. That makes the iPhone plans available for as low as $30 per month*.


This is getting VERY interesting.
Genesis
Posts: 131401
Incept: 2007-06-26
Admin A True American Patriot!
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Yep...

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Exsanguine
Posts: 24
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Green
Fargo
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Gen:

I am glad I found this for you this morning. I only stumbled upon it because I am a Nokia employee and it was tagged in my 'news' feed.

on that note: Verizon will be getting some flavor of Nokia phones this summer , of which I don't know.

Not sure when Sprint will be getting any as I haven't heard any rumors yet.

(I only work for the mapping division , formerly NAVTEQ)

Genesis
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Admin A True American Patriot!
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Yeah I had it on my radar from the morning WSJ

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Mannfm11
Posts: 3606
Incept: 2009-02-28
Gold
DFW, Tx
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I don't think this is a surprise to the market. They might promote T and VZN, but both are paying high dividends. If they were slam dunk growth companies, the dividend yield would be lower, as reflected by a higher price.

I think where these outfits are stuck is the constant upgrade necessary in equipment. 4G is here. When is 5G coming? Phones will also reach a plateau and become base commodities. AAPL will look like DELL in 10 years.

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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
Asimov
Posts: 104615
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Gold
East Tennessee Eastern Time
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Do you honestly think you need something faster than 4g?

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It's justifiably immoral to deal morally with an immoral entity.
If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
Mllange
Posts: 10
Incept: 2012-06-04

Utah
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I'd love to see a Windows phone available on either Sprint or Verizon. No interest in an iPhone.
Peterm99
Posts: 5171
Incept: 2009-03-21
Gold
SoCal
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Asimov (2012) wrote..
Do you honestly think you need something faster than 4g?
Bill Gates (1981 - apocryphal) wrote..
"Nobody will ever need more than 640k RAM!"

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". . . the Constitution has died, the economy welters in irreversible decline, we have perpetual war, all power lies in the hands of the executive, the police are supreme, and a surveillance beyond Orwell’s imaginings falls into place." - Fred Reed

Reason: added "apocryphal"
Asimov
Posts: 104615
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Gold
East Tennessee Eastern Time
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Peter: Not what I meant. I realize times change, but right now is there any need to stream more than 2-3 blue ray quality movies at the same time... to a phone?

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It's justifiably immoral to deal morally with an immoral entity.
If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
Genesis
Posts: 131401
Incept: 2007-06-26
Admin A True American Patriot!
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Current Tmobile service exceeds 10mbps here...

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Bubbazanetti
Posts: 550
Incept: 2007-08-23

NOLA
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Bill Gates didn't say that...... internet rumor run amok.
Peterm99
Posts: 5171
Incept: 2009-03-21
Gold
SoCal
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Need has nothing to do with it.

From the original statement of Parkinson's "Law", "Work expands so as to fill the time available for its completion." came many so-called corollaries such as: "Data expands to fill the space available for storage.". I believe that it is highly unlikely that this concept would not apply to things like data rates, as well.

(The most generalized form I'm familiar with is "The demand upon a resource tends to expand to match the supply of the resource.")

ETA: Obviously, this is not a "law" in the sense of a physical law. It is merely an observation that appears to be generally true but cannot be proven.

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". . . the Constitution has died, the economy welters in irreversible decline, we have perpetual war, all power lies in the hands of the executive, the police are supreme, and a surveillance beyond Orwell’s imaginings falls into place." - Fred Reed

Dazedncornfused
Posts: 324
Incept: 2010-10-13
Green
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>>inserting a dummy HOSTS file or similar<<

How many kb of a file will an iPhone or Android phone accept? I've got one that's >30,000 entries for my computers, web surfing is easy.

On my Nokia Symbian I usually use Opera, but resort to Opera Mini when there's too much junk. The Mini is run through Nokia's DNS servers and does a good job of stripping web pages.

Have to pay for downloading ads? Gaaaaaag. I'll stay with my prepaid SIM, thank you Verizon and AT&T.

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Stand up and be counted or line up and be numbered.
Wearedoomed
Posts: 3610
Incept: 2009-01-14
Silver
slightly red state
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As KD has said before, given the amount of power required to push bits over 4G, as well as the current limitations of battery tech for mobile devices, a major breakthrough in portable power technology will be needed to push bits over whatever 5G is while also maintaining battery life that's comparable to existing mobile tech. Physics whups marketing's ass every time they battle.

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Lies, all of it.
Phxkevin
Posts: 353
Incept: 2010-06-25
Green
Phoenix Arizona
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Perhaps this is the portable power supply

Radioisotope thermoelectric generator
Quote:
RTGs have been used as power sources in satellites, space probes and unmanned remote facilities, such as a series of lighthouses built by the former Soviet Union inside the Arctic Circle. RTGs are usually the most desirable power source for robotic or unmaintained situations needing a few hundred watts (or less) of power for durations too long for fuel cells, batteries, or generators to provide economically, and in places where solar cells are not practical. Safe use of RTGs requires containment of the radioisotopes long after the productive life of the unit.

http://en.wikipedia.org/wiki/Radioisotop....

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Congress persons are all the same, republican or democrat, conservative or liberal. They talk a good game, but the results (or lack thereof) show something different.
Ct1977
Posts: 231
Incept: 2009-08-13

East Hartford, CT
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I'm leaving Verizon when my contract is up in 13 months. Verizon has the best service in my area down in Connecticut. You could be 10 feet underground (which I've done) and still have a perfect signal for making calls. The kicker is that for two 3G smart phones I am paying $180 a month and I have the lowest tier package in terms of minutes, with unlimited texts and data. Grandfathered in on the data but if I upgrade a phone I lose unlimited data.

I'm no longer willing to pay $180 a month for two phones. At some point you have to weigh quality of service vs. price. Now, for me, the price is just too steep.

Sprint has the worst service in my area. A few friends had Sprint and dropped calls and just plain bad reception (no bars) was standard fare. I don't think Sprint has the best coverage for service in my area. Hopefully they change or build out their towers where I live.

I figure the best deal for me will be what Karl has with T-Mobile. Hopefully they have decent reception in my area.

I have a feeling Verizon is going to start to lose customers hand over fist. AT&T as well because they are not far off in pricing from where Verizon is. Just too expensive.

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