Verizon (NYSE: VZ ) swung for the fences Thursday, staking its claim on the
wallets of every mobile phone-using American looking to save money. Subscribers
now can prepay for unlimited voice, text messaging and web service on
Verizon-supported phones a significant shift away from previous policies that
had customers buying single-feature unlimited packages on a per-day or per-month
basis. The new plan gives unlimited access to all of those services on feature
phones but not smartphones for $50 per month, an aggressive pricing strategy
that will see Verizon undercutting nearly all of its competitors. The first to
suffer from Verizons new pricing will be small-scale telecoms whose core
audience is low-income consumers. MetroPCS (NYSE: PCS ), Leap Wireless (NASDAQ:
LEAP ) and others already are feeling the crunch while more and more consumers
flock to big telecoms as their prices become cheaper. Verizons new unlimited
plan should further impact those companies going forward, not to mention
mid-level telecom competitors like Deutsche Telekoms T-Mobile USA. T-Mobiles
would-be acquirer AT&T (NYSE: T ), the nations second-largest telecom and
Verizons primary competitor, also will be damaged by Verizons new plan unless it
rescinds changes made to its own subscription pricing during the past year. The
company did away with unlimited data plans in June 2010, shifting instead to a
tiered set of data plans that give users a cap on the amount of data they can
transfer with their handsets. (This is the same data plan pricing Verizon
currently offers and will continue to offer its monthly subscribers.) Though
Verizons unlimited plans arent available for smartphones, just older feature
phones, consumer perception could be a significant problem for AT&T. Then theres
perpetual runner-up and life-support candidate Sprint Nextel (NYSE: S ). Sprint,
unlike AT&T, also offers unlimited plans in the same mold as Verizons new
offering. The only problem for Sprint is that its unlimited plans run $79.99 per
month. Compared to Verizons $50 prepaid plans and Sprints poorer reputation for
service, consumers might turn away from Sprints selections. Sprint will have the
iPhone 5 in October, though, so it cant be hurt too badly by Verizons new
economical mobile services, right? Its precisely that device and its core
competitors that might limit the potential impact of Verizons new service. The
only phones available with Verizons unlimited plans are the LG Revere, LG
Cosmos, Samsung Gusto and Pantech Caper all of which are feature phones that
can access the web. None of these are smartphones like Apple s (NASDAQ: AAPL )
iPhone or other popular phones like Google (NASDAQ: GOOG ) Android powered
devices like HTCs Thunderbolt or Motorola s (NYSE: MMI ) Droid line. While the
reliability and reputation of Verizons service may entice thrifty consumers to
shift away from Sprint, MetroPCS and others, the new unlimited service wont
dramatically change the telecom landscape without smartphones available. Will
any telecom begin offering unlimited data plans for smartphones as they used to?
Possibly, but not for some time. Theres a possibility that, once Verizon and
AT&T have moved the majority of their consumers to the 4G LTE networks , their
established 3G networks then can be used to provide prepaid unlimited data
transfer plans to customers willing to pay premium prices for the service. That
wont be for some time yet, though. For now, Verizon has another potent tool with
these plans, but not a game-changer. As of this writing, Anthony John Agnello
did not own a position in any of the stocks named here. Follow him on Twitter
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