Verizon’s new 4G data plan promotion sounds awfully generous, but CFO Fran Shammo said at an investors’ conference yesterday that it’s more than just a way to push 4G hardware during the holidays. The deal is also meant to reduce congestion on the company’s 3G EV-DO network, so iPhone users will be able to enjoy a more consistent network experience.
“We want the iPhone user to experience what every other Verizon Wireless person experiences, which is the best, most reliable network in the United States,” Shammo said. “So, in order for them to keep that realization of that experience, we need to make sure that I don’t have to put in any more capacity to 3G.”
Under the terms of the promotion, customers can pay the regular price for an LTE-friendly data plan and Verizon will give them double the data allotment at no extra charge. The standard smartphone data plan, for example, costs $30 and nets the user 2GB. For a limited time, that same user gets 4GB to use with their 4G device for the same price.
The promotion is more-or-less brand new so there’s still no detail on how many customers have taken the bait, but Verizon is probably hoping for a mass exodus away from 3G. By providing an incentive for customers to ditch their old hardware, Verizon hopes to reduce the amount of money they need to spend in order to maintain their older, slower network. In fact, they’ve already begun to trim their 3G maintenance budget — the company reduced the amount of their wireless capital expenditures by $1 billion between Q2 and Q3 2011.
Verizon has had their LTE network lit up for just under a year, but this upcoming holiday season signals a drastic shift in momentum for their 4G portfolio. Motorola, Samsung, and HTC have revealed a string of LTE-capable smartphones whose launches will coincide with the data promo period, and according to Frammo Verizon now has more 4G devices for sale than 3G devices.
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