Exclusive: Verizon to launch $35 prepaid plan with 500 minutes, unlimited mobile web and texting
Verizon Wireless (NYSE:VZ) confirmed that tomorrow the carrier will launch a prepaid plan that includes 500 minutes and unlimited mobile web and texting. The plan will go for $35 per month and will only be available on basic phones.
Verizon spokesman David Samberg confirmed the news to FierceWireless. He said the carrier will begin offering the plan Thursday. The plan will only be available on the 3G CDMA-capable LG Cosmos 2, Samsung Gusto 2, Samsung Intensity III and LG Extravert. Thus, the plan will not be available to smartphones such as those running Android or iOS.
Samberg explained that the plan is designed to appeal to Verizon customers who are heavy data and text users but who don't make many voice calls. For those customers who use more than 500 minutes in a month, extra minutes will cost 25 cents each.
The $35 plan will sit next to Verizon's existing $50 prepaid plan, which offers unlimited calling, texting and data on a handful of 3G feature phones including the LG Cosmos 2 and the Samsung Intensity III.
Verizon's new $35 prepaid plan is an attempt by the carrier to dip into the low-cost, prepaid market, which is dominated by the likes of Sprint Nextel's (NYSE:S) Virgin Mobile, Leap Wireless' (NASDAQ:LEAP) Cricket, MetroPCS (NYSE:PCS) and others. (The plan also takes advantage of CDMA capacity freed by Verizon's LTE network launch.) Verizon has primarily targeted the postpaid market for wireless service, though the carrier has made increasing movements into the prepaid space. As of the end of the fourth quarter, Verizon counted 5.7 million total prepaid customers and 92.5 million postpaid customers.
Indeed, Verizon's new $35 plan could be an attempt by the carrier to goose its prepaid numbers. Verizon added 142,000 prepaid customers in the fourth quarter of 2012 down from the 228,000 it added in the third quarter of 2012 and the 252,000 it added in the same quarter a year prior.
Further, Verizon could be attempting to take advantage of its rivals' troubles. During the fourth quarter Leap reported losing 337,000 net prepaid subscribers, MetroPCS lost 93,000 prepaid customers and AT&T Mobility (NYSE:T) lost 166,000 prepaid subscribers.
The $35 plan from Verizon is the carrier's latest prepaid tweak. Verizon in February effectively cut the price of its high-end prepaid smartphone plan from $80 to $70, bringing its prepaid pricing closer to rival AT&T. Verizon also offers a $60 per month prepaid smartphone plan with unlimited voice, texting and 500 MB of data.
Verizon also offers prepaid plans with per-minute and per-day pricing.
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MetroPCS' Q4 subscriber losses surprise analysts
Verizon moves double data promotion to prepaid: $80 plan now includes 2 GB
Article updated April 10 and April 11 with the details of Verizon's prepaid plan.