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Game changes with Verizon, AT&T, T-Mobile flat-rate voice plans

Verizon Wireless, AT&T Inc. and T-Mobile USA, the nation's leading wireless carriers, ratcheted up their rivalry with all-you-can-eat voice plans for $99.99 a month.

The new voice plans announced yesterday reflect a major shift in the way carriers price their national packages. It is also reflective of the growing commoditization of voice services, thus paving the way for value-added data services to act as the brand differentiator.

"These plans represent a paradigm shift for wireless to flat-rate calling much like several years ago when nationwide calling eliminated long distance charges," said Brenda B. Raney, spokeswoman for Verizon Wireless, Basking Ridge, NJ.

"Today's consumers use their wireless phones as their primary communications tool and don't want to worry about counting minutes," she said. "These plans eliminate minute-counting and minute-worry about going over-budget."

Verizon was first to announce its Nationwide Unlimited Anytime Minute calling plans, followed quickly by AT&T in this new price war that caused the carriers' stock prices to drop yesterday. T-Mobile USA was not far behind with its own announcement.

Customers using the Verizon plan can call anyone in the United States, including those on a landline, for the flat rate.

"Today, customers are increasingly relying on their wireless phones as their primary communications device," Ms. Raney said.

"Verizon Wireless' new Nationwide Unlimited Anytime Minute Plans are easy to understand and give customers the technology they need to manage their lives -- both business and personal," she said.

"The new flat-rate voice plans truly free customers from the worry of counting minutes."

AT&T, the nation's No. 1 carrier, has similar voice plans, not charging for domestic roaming or long distance calls. Existing AT&T customers can choose unlimited calling without extending their contract. New customers can pay month-to-month or sign a 12- or 24-month contract.

T-Mobile's plans differ from Verizon and AT&T's in that it offers unlimited text and picture messaging for an extra $14.99 a month when combined with other company plans.

Four letters: ARPU
Both Verizon and AT&T, however, have made major changes to their data plans as well.

Under the Verizon BroadbandAccess plans available March 2, customers can pay $39.99 for monthly access or 5GB storage for $59.99 monthly access. One eyes the light mobile broadband user, the other the heavy.

With AT&T customers with standard wireless phones can choose a data plan including $5 for 200 text, picture, video and instant messages or $35 for unlimited messaging and Media Net access. The AT&T plans go live Feb. 22.

It is a matter of time before the other key carriers nationwide -- Alltel and Sprint Nextel -- announce similar national flat-rate voice plans. Some carriers already have regional flat-rate plans. Helio, a smaller carrier that rents time from Sprint, offers a $99 monthly unlimited plan.

The flat-rate plans may convince existing Verizon Wireless, AT&T and T-Mobile customers to switch to the new package, thus creating an upsell for both companies. Or they may not be the only incentive necessary to make that happen. It boils down to building loyalty as well as increasing the average revenue per user, a standard metric that carriers live by.

"We're seeing new plans like these from Verizon seeking to raise average revenue per user from existing customers and [to avoid] potential churn," said Ross Rubin, New York-based director of industry analysis at NPD Group.

"It's an attempt to attract consumers to a higher-priced tier and keep some of their most profitable customers," he said. "Voice has already become quite commoditized here in the U.S. So the idea is to lock in consumers for the most minutes and then build data service offerings."