Verizon Wireless Launches Flat Fee Data Services, Expands Coverage

The wireless carrier in June will offer a flat fee of $99.99 for unlimited wireless data send/receive services over its Express Network.

At the same time, the company announced that it is expanding its coverage in 21 markets, including the greater Los Angeles area and regions in Texas.

The company is restricting some vertical applications with high data rates, such as telemetry, from the flat-rate plan.

The price change is significant because the high cost of data transfers is widely held to be one of the stumbling blocks to adoption of the higher speed wireless network services. Solution providers and their business customers, two projected early adopters of high-speed wireless services, have been said to be lobbying wireless carriers for changes in the pricing plans. So far, Verizon is the only carrier to give in to their requests.

"A fixed rate service is the ideal case" for wireless services pricing plans, said Larry Mittag, vice president and chief technology officer at mobile integrator Stellcom, San Diego.

A fixed rate plan is particularly important, said Mittag and other integrators, because it takes the pressure off of financially strapped companies when calculating ROI. Often it can be difficult to project just how much data will be sent and received during a given month; fixed rate lets companies with large wireless data requirements budget for a flat fee.

Denny Stigl, Verizon Wireless president and CEO, told a group at a Lehman Brothers wireless conference in New York today that the new pricing plan was in response to pressure from the enterprise. "It's what our customers have been asking for," he said.

In a recent Yankee Group survey of enterprises, cost was a mid-level concern for IT executives, ranking just below security, speed, geographic coverage and device limitation.

Verizon's price changes come just months before Sprint PCS is expected to launch its CDMA 1xRTT network. The company has said publicly the launch will take place mid-summer and nationwide.

A Verizon spokesman said the carrier expects to cover 75 percent of its markets by the end of the year. But Stigl emphasized that the increased penetration of the faster services, announced today, are hitting key territories.

"We have, effective this week, what we would wall nationwide Express Network services," he said. "We haven't been at all reluctant in rolling out these services in what tends to be the most important focused markets across the United States."

Stigl added that Verizon has been testing CDMA 1xEV-DO in Washington, D.C. and San Diego, delivering speeds up to 2.4Mbps. Verizon will announce at the end of this year or early next year its upgrade plans for this technology, he said.

Verizon and Sprint are the two dominant wireless carriers in the United States using CDMA technology. Both have plans to offer transfer rates of 40Kbps to 70Kbps with peaks up to 1.44Mbps this year. Both also have upgrade plans slated for the second half of the year or later.

Stigl believes Verizon has the edge as the first mover, but Sprint clearly is positioning itself to gain mindshare with integrators and VARs as it moves aggressively to build out its first channel program aimed at this market.

Analysts said the majority of enterprises will be looking to the channel to help build out wireless services. For example, the Yankee Group survey found that 44 percent of enterprise respondents said the channel was their preferred vendor for mobile/wireless solutions. That compares to 36 percent that said they prefer to go through the carrier.

"Wireless adoption will be driven by the level of interest from systems integrators as the enterprises' trusted partner," said Charles Golvin, an analyst at Forrester Research. "Systems integrators will be building and identifying key applications that will deliver return on investment. The value of wireless is not going to be driven solely by e-mail and calendar management."

Sprint said it has signed up several primary partners and is now recruiting sub-agents to work with its distributors. Sprint is using three distributors: Trio Teknologies, Global Wireless Data and Brightpoint. It is also selling direct to Comark, CompuCom and CDW.

At Verizon, meanwhile, the majority of its wireless revenue is generated from retail sales, according to Stigl.