Verizon (NYSE: VZ) today said it will double the amount of data available on some of its prepaid plans, and will also offer unlimited calling to Mexico and Canada. The actions come just a few weeks after the operator reported another quarter of prepaid customer losses.
Specifically, Verizon said it will now offer 6 GB of data on its $60 prepaid plan, up from a prior offer of 3 GB. And on its $45 per month plan, Verizon will offer 3 GB, an increase from 1 GB previously. Both of those data allotments require customers to sign up for Verizon's auto-pay feature, and the $60 plan will also offer unlimited calling to Mexico and Canada. Verizon's $30 per month plan will continue to offer unlimited talking and texting and Wi-Fi data access. Verizon customers can add extra data for $10 per GB.
The changes essentially make permanent a promotion that Verizon launched in February.
Verizon's new prepaid pricing brings the carrier's offerings more closely in line with the prepaid options from T-Mobile and AT&T. For instance, AT&T's Cricket prepaid brand offers 10 GB of high-speed data for $55 per month and 2.5 GB of high-speed data for $35 per month with auto-pay activated (user data speeds are slowed after those data allotments are surpassed). And T-Mobile's MetroPCS prepaid service offers unlimited data for $60 per month and 3 GB of high-speed data for $40 per month (again, users speeds are slowed once they exceed their data cap).
Verizon's new prepaid data pricing could help the carrier recover some momentum in a prepaid market where it is losing hundreds of thousands of customers every quarter to the likes of Cricket and MetroPCS. In the first quarter, AT&T reported 500,000 prepaid net additions and T-Mobile reported a record 807,000 net prepaid customer additions. Verizon, meantime, lost 177,000 net prepaid users during the quarter, which was actually down from the 188,000 net losses it posted during the prior year.
Verizon executives have suggested those losses are an acceptable sacrifice as the operator focuses on more lucrative users. "Look, coming into 2015 and again in 2016 we said that the top priority would be to maintain the high quality of the base," Verizon CFO Fran Shammo said during the operator's recent quarterly earnings call with analysts. "We now have 48 percent of our base on the new pricing (for unsubsidized handsets paid via installments) and we continue to push for that…. Our retail prepaid is above market. We're really not competitive in that environment for a whole host of reasons and it's because we have to make sure that we don't migrate our high-quality postpaid base over to a prepaid product."
Interestingly, Shammo also said during the call that América Móvil's U.S. MVNO TracFone essentially stands as Verizon's play in the prepaid space -- noteworthy comments considering TracFone, the largest U.S. MVNO, lost 58,000 net customers last year as users fled its voice-only plans, and TracFone sells service from all of the nation's major U.S. wireless operators.
- see this Verizon release
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