For the subscribers that fall within the top 5% of the network’s data users, Verizon said it may reduce their download speeds for the current and subsequent billing cycles, according to a memo on the carrier’s website. The company said the slow-down would most likely be periodic and during peak hours.
“Our proactive management of the Verizon Wireless network is designed to ensure that the remaining 95% of data customers aren’t negatively affected by the inordinate data consumption of just a few users,” the memo said.
But that 5% isn’t just a “few” customers: Verizon has 21.5 million smartphone customers, which means the top 1.1 million data users will have their speeds throttled down each month.
Verizon (VZ, Fortune 500) declined to comment, saying the company will let its comments to other news outlets to do the talking. A spokesman told The Wall Street Journal that Thursday’s announcement had nothing to do with the iPhone pre-sale that launched on the same day.
“This is clearly something we’ve been looking at for some time and introducing now,” Verizon Wireless spokesman Jeff Nelson told the Journal. “There’s nothing magic about the timing.”
T-Mobile is currently the only other U.S. wireless carrier that throttles speeds for its top users. That company slows down data throughput speeds for customers that exceed 5 gigabytes of data usage per month.
AT&T (T, Fortune 500) instituted data tiers for its customers, offering a lower-priced plan for light downloaders and a 2 GB cap for heavier users. Those that exceed the 2 GB cap have to pay AT&T an overage charge of $10 per gigabyte.
Mobile carriers are looking for solutions to a growing problem: mobile data usage is growing fast, and building up their networks to handle all that traffic is an expensive proposition.
The average smartphone user’s monthly wireless download traffic doubled in 2010 to 153 megabytes, according to a wireless data report released Tuesday by Cisco (CSCO, Fortune 500).
But T-Mobile and Verizon have found an easy culprit to go after: The Cisco report also revealed the top 1% of mobile data users account for 20% of all mobile traffic.
Source: CNN Money