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Verizon Data Caps Coming: How To Budget Your Wireless Usage

Verizon Data Caps

PETER SVENSSON   07/ 5/11 10:01 PM ET   AP

NEW YORK — Are you a wireless data glutton or a nibbler?

New Verizon Wireless customers will have to figure that out starting Thursday as the country's largest wireless carrier plans to roll out data plans with monthly usage caps.

Verizon said Tuesday that under the plans, new smartphone users will pay between $30 and $80 each month for plans that include 2 to 10 gigabytes of data usage. Customers who use more than their allotment will be charged $10 more for each additional gigabyte. The company currently charges $30 a month for an unlimited smartphone data plan.

This is well-trod ground – AT&T introduced capped data plans a year ago. T-Mobile USA changed its unlimited data plan in May. Although it doesn't charge overage fees, the company slows the speed at which customers can send and receive data once they hit their allotted amount.

The new Verizon plans will apply both to new customers and existing customers who are trading up to smartphones.

The tricky thing about capped data plans is that few people have a clue how much a megabyte of data is, so they don't know much to sign up for. The phones themselves aren't much help: Although they can tell you how much data you've consumed so far this month, they can't tell you which of your smartphone's myriad functions are responsible.

By contrast, a minute spent talking on the phone is easy to understand, and many people have learned roughly how many minutes they use every month.

For AT&T, the introduction of data caps has gone quite well, but some customers are complaining because their data usage reports are hard to decipher. AT&T says 90 percent of its customers on capped plans stay within the limits, but it won't say how much those who go over end up paying, on average.

Here's some help determining which plan will work for you, even if you don't know how many megabytes are in a gigabyte.

_ Less than 200 megabytes per month.

For those with feature phones who want a taste of the Web, Verizon will be offering a plan with 75 megabytes per month plan for $10 per month. But any plan with less than 200 megabytes per month should be considered mainly a tease.

Email, automatic software updates and other data consumption in the background will easily eat up 75 megabytes in a month. That could leave you paying $10 or more in overuse fees – more than you would if you had chosen a more expensive plan to begin with. This plan sounds like Verizon's way of luring people to smartphones. Pick something like this, and pretty soon, you'll find you need a higher data cap.

_ 200 megabytes per month.

This is a popular size, offered by both AT&T ($15 per month) and T-Mobile ($10), but Verizon won't be offering it. When it introduced this plan, AT&T said 65 percent of its subscribers consumed less than 200 megabytes.

But that was a year ago. The average monthly data consumption for a smartphone user back then was 230 megabytes per month, according to an analysis of phone bills by The Nielsen Co. In the first quarter of this year, the figure had grown to 435 megabytes per month.

Cisco Systems Inc. has lower estimates than Nielsen: 153 megabytes per month last year and 245 megabytes this year. In any case, the message is clear: a plan that was big enough last year may not be big enough this year. Subscribers seem to be discovering more fun and data-consuming things to do on their phones.

It's still possible to get by on 200 megabytes per month. If you're a light user, stay away from heavy-usage applications such as online music streaming and Netflix video. Use Wi-Fi rather than the phone's cellular network as much as possible. Wi-Fi usage doesn't count toward your data limit.

_ 2 gigabytes per month.

This is AT&T's "standard" plan, for which it charges $25 per month. T-Mobile charges $20, and Verizon will charge $30. This will be enough for most people: Verizon said Tuesday that 95 percent of existing customers use less than this amount each month. And AT&T said last year that the plan would satisfy 98 percent of its smartphone users (that figure is undoubtedly lower today). If you like to stream online music or videoconference for hours on end, or watch Netflix movies, you'll blow past it.

_ 5 gigabytes per month.

Verizon will charge $50 for this tier, while T-Mobile charges $30. This would be for those who spend a lot of time on their phones. Laptop cards generally come with this data limit.

_10 gigabytes per month.

Those who intend to use a ton of data may gravitate to this plan, for which T-Mobile charges $60 and Verizon will be charging $80. While unnecessary for most smartphone users, this type of plan will give you plenty of data for streaming videos and music, uploading photos and surfing the Web.

What if you don't want to bother with any of this?

Sprint Nextel Corp. offers unlimited data, seeing it as a crucial way to keep and attract customers who are tempted by an iPhone at Verizon or AT&T.

However, offering an all-you-can-eat data buffet gets expensive. Sprint raised the fees for all its smartphones by $10 per month this winter to $30.

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AP Technology Writer Rachel Metz in San Francisco contributed to this story.

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Filed by Catharine Smith  |