Wall Street's Still Freaking Out Over Verizon Unlimited Data Wall Street analysts continue to worry and whine about Verizon's return to unlimited data. Earlier this month we noted how many analysts quickly engaged in some breathless pearl clutching, worried that Verizon might actually have to compete on price (say it ain't so!). That's a far cry from Verizon's traditional MO, which was to insist that the company's network was simply so fantastic it didn't need to compete on price, while insisting consumers didn't want or need simpler unlimited data plans. Obviously T-Mobile, and customers themselves, had a little something to say about that.

Now Wall Street analysts are engaged in another round of breathless face-fanning, many worrying that Verizon's network can't handle the load of offering unlimited without throttling video like other operators. Roger Entner, an analyst at Recon Analytics, went so far as to tell Bloomberg that Verizon's plan was "dangerous." "An unlimited offer is dangerous," Entner said. "If they sign up a lot of people, it will congest the network, and they run the risk of people saying ‘the network sucks’." Other analysts simply remained worry that with T-Mobile a competitive thorn in Verizon's side, the company will make a slightly-smaller mountain of money over the long haul. "Verizon’s decision to offer unlimited helps near-term subscriber growth and should enable it to avoid extending its two-year losing streak of customers in Q1,” Walter Piecyk of BTIG Research noted (reg. req.). “However, it does have a negative impact over the longer term, which we believe outweighs the benefits. We estimate Verizon Unlimited cost the company … $3 billion of value or 75 cents per share based on the analysis below.” Not all analysts were quite so dour. Craig Moffett argued this week that this is a perfect opportunity for Verizon to put its money where its mouth is in terms of having the best network in the business. With Verizon competitors offering unlimited data plans that throttle video, games and music by default (in some cases requiring an additional fee to open the spigot to HD), it's actually an opportunity for Verizon to regain some lost footing in its battle against T-Mobile. "Verizon appears to believe not only that their network is prepared for the inevitable volumes that will come with unlimited video, but that their competitors are not," said Moffett. "Verizon appears to believe not only that their network is prepared for the inevitable volumes that will come with unlimited video, but that their competitors are not," said Moffett.







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Most recommended from 45 comments



Zenit

The system is the solution

Premium Member

join:2012-05-07

Purcellville, VA 42 recommendations Zenit Premium Member Short term market raiders Short term investors, if you don't like a telco doing things to improve service or reduce cost I suggest you dump all of your Verizon stock so that long term investors can pick up shares at a good price.



Shot term mindsets have no place in telecommunications or any infrastructure business. It's a long term game because of the nature of the business.

trparky

CYA! I'm gone!

Premium Member

join:2000-05-24

Cleveland, OH 18 recommendations trparky Premium Member Oh you poor little babies... My heart bleeds for you.



NOT!

IowaMan

Premium Member

join:2008-08-21

Grinnell, IA 6 recommendations IowaMan Premium Member it is not too bad around here I wouldn't call this overloaded it all

SpottedCat

join:2004-06-27

Miami, FL 4 recommendations SpottedCat Member Congestion management



My suspicion is that Verizon and the other carriers now have more capacity than they need in a lot of places, especially with newer LTE revisions and more spectrum, so they are willing to offer unlimited plans again.



Congestion management can avoid performance bottlenecks. Sure, the absolute heaviest users will be penalized, but they are a small percentage of total users. Also methods like AT&T's StreamSaver that reduce video bitrate to save bandwidth can help relieve the crush.



Things have changed a lot since the days when the providers dropped their original unlimited plans. Investors should relax; us network geeks got this. With proper congestion management, unlimited plans aren't going to crush the network.My suspicion is that Verizon and the other carriers now have more capacity than they need in a lot of places, especially with newer LTE revisions and more spectrum, so they are willing to offer unlimited plans again.Congestion management can avoid performance bottlenecks. Sure, the absolute heaviest users will be penalized, but they are a small percentage of total users. Also methods like AT&T's StreamSaver that reduce video bitrate to save bandwidth can help relieve the crush.Things have changed a lot since the days when the providers dropped their original unlimited plans. Investors should relax; us network geeks got this.

Anon937fb

@monroe.edu 3 recommendations Anon937fb Anon America's Downfall The downfall of the American dream started in the 80's with the advent of 401k's, mutual funds and the stock market sharks who started demanding short term results over long term goals. Every business goes through natural ups and downs. The "penalties" put on companies by the stock gurus when they can't turn quarter after quarter of profit has led to the type of cost and service cutting that is typical of this wall street freakout.