Verizon Communications will raise prices for some of its older mobile plans by USD 2.00 per line per month, according to the Wall Street Journal. The price increase will not apply to current unlimited plans; only to unlimited postpaid plans from seven years ago, including the Beyond Unlimited and Go Unlimited plans. The company said customers will be able to avoid the rate increase by switching to a currently offered unlimited plan.
The company began notifying affected customers of the rate increase last week, with a spokesperson saying the higher price reflects “the added cost of maintaining these legacy plans.”
With this price increase on older plans, Verizon is clearly hoping to prompt customers to re-evaluate their plans and consider switching to new ones. The newer unlimited plans offer a higher threshold of top speed data for a lower price, so a switch would make sense from the consumer’s perspective. However, the operator’s decision to raise the prices of its legacy plans instead of forcibly migrating customers to newer plans is a calculated move that reflects the company’s understanding of the US consumer mindset.
While Verizon has the power to end those legacy plans and force migration, doing so is risky. In the United States, where consumer choice is highly valued, such a move could result in backlash and hurt Verizon’s reputation in the long run. In addition, US customers have many choices, and if they feel they are being treated unfairly, they may decide to switch to a competitor.
By increasing prices on legacy plans instead, Verizon is choosing a less drastic approach. Their strategy may still result in more customers moving to the newer plans, because the change in price will likely motivate customers to explore alternative offerings and discover that the newer plans offer more for less. But by encouraging customers to make the decision to switch themselves, the operator couches the decision in consumer empowerment.