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Verizon joins the unlimited wireless plan fray as growth slows


Last month, Verizon chief financial officer Matt Ellis said the company didn’t feel like it needed an unlimited plan to compete with AT&T, T-Mobile and Sprint, but “we continually monitor the market and we will see where we head in the future.”

The future appears to be today as Verizon on Sunday outlined plans for an unlimited plan dubbed Verizon Unlimited. Verizon Unlimited provides video streaming, mobile hotspot, calling and texting to Mexico and Canada with up to 500 MB a day in 4G roaming coverage for $80 a month. Additional lines will run $45 a month.

Verizon’s spin on unlimited plans is its network quality. In a statement, Verizon noted that it can adjust to customer demand for bandwidth with its antenna technology and software defined networking tools. The company also touted its back-end fiber and small cell deployment.

Like other plans, Verizon said that customers who pass 22 GB of data a month will have traffic prioritized. Other fine print items include mobile hotspot data to 10 GB for 4G and then 3G speeds after.

T-Mobile has pushed unlimited plans and recently switched to one plan, dubbed T-Mobile One. T-Mobile One is $40 a line all-in. AT&T’s plan is unlimited and is designed to bundle DirecTV too. Sprint has a five-line deal for $90, but there is a catch.

The discussion among analysts about Verizon’s unlimited plan is likely to revolve around whether the company had to react or not. Verizon’s fourth quarter results and outlook last month were mixed. Evercore analyst Vijay Jayant said in a research note that the advantages held by AT&T and Verizon have faded. Now those carriers are going to have to compete on cost even as they try to couple media and distribution together.

Jayant said:

The U.S. telecom landscape is increasingly dominated by wireless, and US wireless competition continues to intensify. Subscriber growth has slowed, as the market is largely saturated, and operator network performance has substantially converged, allowing smaller competitors to effectively use price and features as a competitive tool.

Meanwhile, it’s unclear whether Verizon’s move to acquire Yahoo to combine with AOL and AT&T’s plans to acquire Time Warner will pay off, said Jayant, who said that T-Mobile has the best growth prospects.

In a chart, Jayant summed up the wireless industry and how unlimited plans are the cost of admission to keep customers.

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