Verizon Wireless To Unveil Tiered Data Plans On Oct 28--Source

Verizon Wireless plans to introduce a less expensive--but restricted--data plan for smartphone customers next week, according to a person familiar with the plans, in a move that follows AT&T Inc.'s (T) own offer of two tiers of pricing.

The nation's largest wireless carrier by subscribers will offer a $15 monthly plan that gives customers 150 megabytes of data. But unlike AT&T, it will keep available its unlimited data plan for $29.99. The new plan will be available on Oct. 28. The plan was first reported by technology news website Engadget.

The move is part of a broader shift by carriers to change how they charge customers for the use of Internet, email and music downloads through their cellphones. Carriers have to juggle offering these data services at a fixed rate with sufficient investment in the underlying networks to ensure the traffic flows smoothly.

But the lower-priced data plan has also proven to be a boon for AT&T, luring new customers into upgrading to a smartphone. Verizon Wireless hopes the introduction of its $15 plan--which for now is considered a holiday promotion for the fourth quarter--will pay off in the same way.

Verizon Wireless will look at how successful the plan is before deciding whether it will extend the offer permanently, the person said. For now, the $15 option is seen as an affordable option that can better compete with AT&T's own tiered plans. Customers who exceed 150 megabytes will be charged 10 cents per megabyte.

In June, AT&T introduced capped plans for data. Instead of a $30 unlimited plan, it began selling a $15 plan for 200 megabytes of data and a $25 plan for two gigabytes of data. Customers who went over their limit had to pay a charge of $15 or $10, respectively.

Verizon Wireless is jointly owned by Verizon Communications Inc. (VZ) and Vodafone Group PLC (VOD, VOD.LN).

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; [e-mail]