Verizon provides a potential model for operators to grow ARPU once all customers take unlimited data plans
Verizon has been remarkably successful in migrating customers to unlimited mobile data plans – it reports that 80% of its customers take an unlimited plan. This apparent success has an obvious downside for Verizon – how can it justify further prices rises?1
Verizon is trying to overcome this and increase ARPU by offering multiple tiers of unlimited mobile data plans. It is differentiating its plans by offering:
- faster data speeds than in basic mobile plans
- entertainment (video game platforms and streaming video services)
- other services (cloud storage, TravelPass and discounts on other products).
Although these offers will attract some consumers, they have their weaknesses. However, the basic model used by Verizon and other US operators is one that operators worldwide should explore as a greater share of their customers move onto unlimited plans.
1 The success also has some less obvious disadvantages – customers on unlimited plans have a lower NPS than those on lower-tier plans.