Verizon's unlimited data plans were launched earlier this year. Since then, the carrier has struggled with its network speeds due to the high consumption of data by consumers. A month ago, Verizon broke down its unlimited plans into three parts, which were meant to decrease the overall data consumption. The carrier imposed some limitations to the unlimited browsing, the most important of which is the limitation of streaming videos at 480p. In an interview with CNBC, Verizon CEO Lowell McAdam revealed that restricting the stream quality would indirectly save the company $10 billion.
What did McAdam say?
McAdam stated that restricting the Video Quality in the lowest unlimited plan to 480p would not affect the consumers much, but would allow Verizon to pursue advancements in its connections. He feels that most people cannot differentiate between 480p videos and 1080p or Full HD videos on mobiles. So, Verizon's offer allows customers to choose if they want to pay more for clearer picture quality or whether they are satisfied with the 480p cap.
However, the primary reason for this restriction is that Verizon hopes that most of its consumers will pick the lower plan, which will allow the speeds in its network to be maintained, without putting it under intense stress. If all of the customers started subscribing to the Full HD video streaming unlimited plans, then the company would have to invest additional money to ensure that the data speeds do not get throttled during high network traffic periods.
With the new 480p video streaming limit, Verizon will not have to invest this additional amount and thus will be able to save close to $10 billion over a period of four years. This excess money will be invested into perfecting the upcoming 5G internet connections. This may be how Verizon plans on staying ahead of its competitors like T-Mobile and AT&T.
Verizon not threatened by T-Mobile and AT&T free Netflix and HBO offers
McAdam also revealed during the same interview that his company is not at risk from the likes of T-Mobile and AT&T. T-Mobile has started offering Netflix for free to some of its subscribers through its 'Netflix on Us' deal, while AT&T has been offering free HBO.
McAdam says that Verizon does not need to offer premium services for free to build its customer base.
He believes that if Verizon wanted to provide a premium video streaming service, such as Netflix, it would ensure a proper contractual agreement with the company. The Verizon CEO feels the quality of the network will, at the end of the day, decide if consumers are happy with a particular carrier or not.
