For years Verizon Wireless has defended its higher prices by insisting they simply reflect the incredible superiority of the Verizon network. It's not only why Verizon often refuses to compete on price in anything other than a superficial level, but it's why the company also continues to pretend that consumers don't want unlimited data. But with reports this week that T-Mobile's network is finally catching up in both speed and coverage, Verizon is going to be forced to do something it has simply refused to do over the last decade: actually listen to its customers.
In a competitive market, the consumer is supposed to tell
you what they want, and you try your best to deliver it.
Verizon Wireless has consistently embraced the opposite strategy: telling consumers what it is they're supposed to want.
Nothing exemplifies this more than Verizon's insistence that users don't want or need the simpler option of unlimited wireless data, an option Verizon technically eliminated back in 2011. Ever since, Verizon's been repeatedly trying to convince users that their desire for simpler, unlimited plans is simply a "gut feeling" they should ignore.
"While unlimited data may sound attractive, there is no practical effect of data limits on the majority of users," A Verizon consultant tried to argue in a blog post by the company. "Understanding this should bring rationality to a discussion that is often held on a “gut feeling” level."
At the end of the day, people don't need unlimited plans -Verizon CFO Fran Shammo |
A
new Verizon ad proclaims that most users buy more data than they need, ignoring that Verizon scares users into doing this quite by design. Because "two out of three people use less than five gigs," the add claims, the company's $55 for 5 GB (plus all the various connection and other charges) plan is all users should ever need.
The ad reflects Verizon executive statements over the last few years. Verizon seems to think that by repeatedly telling users they don't want unlimited data plans, this will somehow, magically, become true.
"At the end of the day, people don't need unlimited plans," Verizon Chief Financial Officer Fran Shammo said last September. "You cannot make money in an unlimited data world," the CFO added, ignoring the fact that T-Mobile, well, exists.
Verizon's behavior has been a master class in hubris. It's the kind of thinking that's developed at companies that have spent generations as government-pampered mono/duopolies, leading them to somehow believe they're above the rules of reality.
This hubris extends to Verizon's dedication to endlessly raising prices and believing that consumers don't notice. Most recently that manifested in Verizon's decision to increase the company's "upgrade fee" to $30. At the time, Verizon claimed this hike was necessary because of "increased costs," ignoring the fact that Verizon's costs actually have declined in recent years.
Consumers aren't always the brightest bulbs in the drawer, but the lion's share of them can still somehow ferret out that Verizon's bullshitting when it claims that more restrictions and higher prices are somehow better. As a result, T-Mobile continues to add more postpaid customers per quarter than any other wireless carrier in the industry, and Verizon's been left looking to gobbling up failed 90s internet brands in a desperate attempt to deliver growth to insatiable investors.
But there's an obvious path forward for Verizon executives if they want T-Mobile's impact on earnings and growth to end: stop bullshitting, and start actually competing.