gesture

Verizon cuts prepaid smartphone plan with 2 GB of data from $80 to $70

Tools

Verizon Wireless (NYSE:VZ) effectively cut the price of its high-end prepaid smartphone plan from $80 to $70, bringing its prepaid pricing closer to rival AT&T Mobility (NYSE:T). However, Verizon's prepaid services are still much more expensive than those from many traditional prepaid and flat-rate players.

Verizon made the change a day after its promotional offering for unlimited voice, texting and 2 GB of data for $80 per month ended. That promotion, which began in late November, doubled the data allotment in its $80 prepaid smartphone plan from 1 GB to 2 GB per month.

Verizon's new prepaid smartphone plan with 2 GB of data will cost $70 per month. Verizon is also offering a new $60 per month prepaid smartphone plan with unlimited voice, texting and 500 MB of data. Customers can purchase an extra 1 GB of data for $20 when their data balance reaches 100 MB or lower.

In explaining the pricing change, Verizon spokesman Brian Malina said "prepaid customers have indicated that they want smartphones and this responds to that need."

Verizon said the plans are available for "many" 3G smartphones that run on Android, BlackBerry or iOS, such as the Samsung Illusion, the HTC Droid Incredible 2 and most BlackBerry models (though for older ones and not new BlackBerry 10 devices). Verizon also indicated that customers can bring their existing phones to the service.

In the fourth quarter Verizon added a net 142,000 retail prepaid subscribers, down from 252,00 retail prepaid net additions in the fourth quarter of 2011. Verizon had a record-high 2.1 million retail postpaid net additions in the fourth quarter of 2012.

Verizon's plans seem to be a response to AT&T's October launch of a $65 GoPhone prepaid plan with unlimited voice, texting and 1 GB of data, which had undercut Verizon's $80 per month offer. Prior to the launch of its $65 plan, AT&T had offered unlimited voice, texting and 1 GB of data for $75 per month.

Industry analyst William Ho said Verizon's new pricing indicates the carrier wants to make use of its 3G CDMA as it continues to push postpaid users to its LTE network, which now covers 273.5 million POPs. However, Ho noted Verizon's prepaid pricing remains above those of rivals. "They (Verizon) want to have the people who will pay the premium and respect the Verizon network and are willing to pay for that," he said.

Ho added that Verizon and AT&T are fighting for the high-end of the prepaid market, especially for customers who may have ditched postpaid plans but still are willing to pay for what they perceive as a high-quality network.

T-Mobile USA, Sprint Nextel's (NYSE:S) Boost Mobile, Cricket provider Leap Wireless (NASDAQ:LEAP) and others offer unlimited talking, texting and a bucket of data for $50 or less per month. In January MetroPCS (NYSE:PCS) simplified its plans and now offers unlimited voice, texting and LTE data for $60 per month.

For more:
- see this Verizon site
- see this Verizon post

Related Articles:
Verizon adds 2.2M subs in Q4, but margins shrink amid smartphone surge
MetroPCS simplifies LTE pricing plans, ditches $30 and $55 offerings
MetroPCS' Q4 subscriber losses surprise analysts
Verizon moves double data promotion to prepaid: $80 plan now includes 2 GB
AT&T undercuts Verizon with $65 prepaid smartphone plan
Verizon expands smartphone lineup for $80 prepaid plan