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Verizon Wireless eyeing tiered data service

Following on the heels of AT&T, the carrier may introduce tiered pricing for its data plans as smartphone use surges, Verizon CFO John Killian said in a BusinessWeek interview.

Verizon Wireless is toying with the idea of eliminating its unlimited data plans and switching to tiered pricing, according to its parent company's chief financial officer, John Killian.

In an interview with Bloomberg's BusinessWeek, Killian said, "We will probably need to change the design of our pricing where it will not be totally unlimited, flat rate."

A jump to tiered pricing would mimic a similar move by AT&T, which put the brakes on its unlimited data plan earlier this month.

Under AT&T's DataPlus plan, customers will now pay $15 a month for 200 megabytes of data and $15 for each additional 200MB over their quota. Under the DataPro plan, customers pay $25 for 2 gigabytes of data and an additional $10 for each extra 1GB.

Killian told BusinessWeek that Verizon expects an explosion in wireless traffic as new phones roll out on 4G networks and people consume heavier amounts of data for tasks like downloading videos. The company is striving to keep its own network running smoothly as more customers jump to Internet-enabled smartphones.

Verizon customers using smartphones like the Droid and Incredible are each grabbing between 600MB and 800MB of data every month, similar to what iPhone customers use, Killian said. And over time, smartphone users will make up 70 percent to 80 percent of Verizon Wireless customers, up from around 17 percent today, he added.

Verizon Wireless is in the midst of upgrading its networks to 4G. Though Killian couldn't provide specific details on the rollout, Verizon's chief technology officer, Dick Lynch, said earlier this year that the company is on track to offer its LTE-based 4G wireless service later in 2010 and will unveil its first 4G handsets around the middle of 2011.

As for Verizon's competition, Sprint already launched its first 4G phone, the HTC Evo, earlier this month. AT&T has said it would start with a few commercial deployments of 4G next year, with more to follow in 2012. T-Mobile has said it will deploy a 4G network to cover most of the U.S. by 2015, though it already offers high-speed 3G access through HSPA+ (High Speed Packet Access), which it claims is as fast as 4G.