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The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.



) -- At a recent


Global Technology Summit,


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mentioned that it plans to move away from its $30 unlimited data plan during the summer and will instead put family shared data plans into play.


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is already on tiered data plans and it will be interesting to see if


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continues with its own. So why would Verizon move away from unlimited data plans?

The answer to this question likely lies in data pressure on the network. Lately, the data usage has risen tremendously. With the advent of tablets and smartphones with higher processing power coming to the market, mobile users are increasingly being encouraged to use heavy amounts of data. Even though Verizon is laying out its LTE network, having unlimited data plans might not be viable going forward. A parallel that can be drawn from wired broadband is



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data caps.

How might family plans fare? Given that many devices are now in market and users tend to have different data usage patterns, a family plan shared among several devices might not be a bad idea. A combined data cap could prove more efficient in terms of data utilization as both a low data user and a high data user from the same family can utilize it. A lot will depend on pricing and data limits.

Verizon has not revealed details around family shared data plans. Therefore, it is difficult to judge what the impact could be on average data revenue per user. One could say that a family plan is likely to have tiers with higher data caps than what we see for individual AT&T plans. Since the bandwidth will be shared, it might encourage typical low data users to shift their data consumption patterns and may overall encourage families to subscribe to higher tiers. If this works out, Verizon could see upside to average revenue per user (ARPU).

Our price estimate for Verizon's stock stands at $34.48, which is below market price.


our complete analysis for Verizon's stock here.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.