June 21, 2011 / 3:43 PM / in 6 years

Verizon to kick off usage-based pricing in July

NEW YORK (Reuters) - Verizon Wireless plans next month to move to usage-based wireless data pricing options instead of its flat-rate unlimited-use plans, increasing wireless bills for some customers.

The wireless venture of Verizon Communications and Vodafone Group Plc told Reuters in May that it would move away from unlimited-use options this summer but gave no specific time.

Spokeswoman Brenda Raney on Tuesday described the upcoming pricing changes as minor but declined to give details.

JPMorgan analyst Rod Hall said the move to metered pricing could drive consumers away from cellular devices and toward devices like tablets that are only connected by Wi-Fi, a short-range network technology that many people can use on an unlimited basis at home.

It may make “carrying multiple devices prohibitively expensive for many users,” Hall said in a research note.

“As a result we would expect already popular Wi-Fi-only tablets to gain more traction and network usage growth to potentially slow in the short term,” he said.

Verizon’s biggest rival, AT&T Inc, eliminated its unlimited-use flat fee plan a year ago, raising the ire of many wireless customers.

The change forced AT&T’s heavier data users to pay more for data services than the $30 a month it had previously charged. On the flip side, lighter data users pay half what they would have been charged under the older plan.

“We’ve been very happy with these plans, and they’ve brought millions of customers to the smartphone category,” AT&T spokesman Mark Siegel said.

Reporting by Sinead Carew; editing by John Wallace

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