Verizon's iPad data plan: One plan to rule them all?

October 18, 2010: 12:47 PM ET

Depending on which of the new plans you choose, you could end up saving a few bucks, spending roughly the same, or paying through the nose.

Back in June, two months after the iPad launched in 3G and Wi-Fi-only flavors, Fortune recommended that potential buyers skip the 3G option, buy a Wi-Fi version and pair it with a MiFi router instead.

It seems Verizon (VZ) got the hint. On October 28, the largest mobile carrier in the U.S. will start rolling out iPad bundles that couple 16, 32, and 64 GB Wi-Fi-enabled iPads with a Verizon MiFi 2200 router.

iPad-MiFi bundle prices will match Apple's (AAPL) 3G sticker prices dollar-for-dollar: 16 GB for $629, 32 GB for $729, and 64 GB for the $829. Verizon data plans will come in three tiers: 1 GB for $20, 3 GB for $35, and 5 GB for $50.

Depending on which plan you choose, you could end up saving a few bucks, spending roughly the same, or paying far more than other plans from Verizon itself or from competitors because overage penalties could be severe:

  • 1 GB plan. Of the three proposed plans, subscribers must pay the most in overage charges with the 1GB package: $20 for every additional gigabyte.
  • 3 GB plan. Subscribers will need to fork over an additional $10 for every gigabyte used beyond the allotted 3 GB.
  • 5 GB plan. As with the 3 GB plan, subscribers will face $10 charge for going beyond the five gigs. In fact, that's actually $9 cheaper than Verizon's standalone 5 GB MiFi plan.

While Verizon first-timers need to sign a service agreement, they can pay month-to-month rather than commit to 12 or 24 consecutive months with the carrier.

The downside? If users choose the 1GB plan go over their allotment, they'll pay through the nose -- if they go hog-wild and use as much as 5 gigabytes, they'll pay $100.

If you opt for the 5 GB plan right out of the gate, though, you'll save $9 a month when compared to similar plans from competitors.

Here's how things shake down when you compare Verizon's 5 GB MiFi plan to other Verizon offerings and non-Verizon options:

Verizon iPad bundle
$50 for 2 years = $1,235.00, includes month-to-month payment, plus $35 activation fee.

Non-iPad Verizon MiFi plan
$59.99 for 2 years = $1,474.76, with free router unit (after online discount) and $35 activation fee

AT&T 3G for iPad
For 4.001 gigabytes to 5 GB*
$55 for 2 years = $1,450.00** (No activation fee.)

Sprint 4G MiFi
For unlimited 4G/5GB of 3G per month
$59.99 for 2 years = $1,439.76, with free wireless MiFi router (after online discount), no activation fee

Though Verizon's overage fees may be unforgiving, the month-to-month policy is. Big Red says users can upgrade (or downgrade) to a plan that better fits their media consumption without penalty, whether they're a data hog or a casual user. Which should make all that inevitable media consumption -- 2 GB is the equivalent of 6 to 12 hours of Netflix movie streaming, after all -- more agreeable with the ego and the wallet.

*By default, AT&T does not offer a 5 GB data plan option. My calculations include the now standard 2 GB plan for $25 and factor in an additional $30 for the extra data. And for those wondering about the 4.001 GB figure, know that if you go even 1 megabyte over, you're automatically bumped up to the next price tier.

** This price also includes the $130 premium one pays for choosing an iPad equipped with 3G over a Wi-Fi iPad.

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About This Author
JP Mangalindan
JP Mangalindan
Writer, Fortune

JP Mangalindan is a San Francisco-based writer at Fortune, covering Silicon Valley. Since joining in 2010, he has written on a wide array of topics, from the turnaround of eBay to the evolution of net neutrality. A graduate of Fordham University, Mangalindan has also written for GQ, Popular Science, and Entertainment Weekly.

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