AT&T ups data options for GoPhone as Verizon kills low-end prepaid plans

Image: Moyan Brenn/Flickr

The nation’s two largest mobile network operators appear to once again be moving in different directions in the prepaid market.

PrepaidPhoneNews reported that AT&T has upped the amounts of data it offers through add-on options to plans for customers of its GoPhone brand. Users on the $30-a-month plan – the cheapest available – can now purchase 250 MG of data for $5, up from 100 MB, and customers with the $45 monthly plan can spend $10 more to access 1 GB, up from 500 MB.

GoPhone also added a heftier data add-on for its $60 monthly plan.

Meanwhile, Verizon recently killed two of its cheapest prepaid plans, PrepaidPhoneNews said in a separate report. The operator discontinued a $30-a-month smartphone plan that included unlimited domestic voice minutes and messaging as well as unlimited to Mexico and Canada, but not any data. And it no longer offers a $15 monthly plan for feature phone users that included unlimited mobile web and 300 minutes or texts.

Verizon and AT&T have adopted very different strategies regarding the prepaid market over the last few years. AT&T has pursued prepaid users aggressively – and successfully -- through its Cricket brand even as it sacrifices some postpaid customers to focus on high-end subscribers. Verizon, in contrast, has shied away from the prepaid market for fear of cannibalizing its lucrative base of postpaid customers.

Competition in the prepaid market has heated up, however, and the ARPU gap between prepaid and postpaid is narrowing as carriers find ways to better monetize customers who aren’t interested in postpaid services. Verizon added 83,000 net prepaid users in the most recent quarter after it updated its pricing structure to address that market more effectively. Verizon’s latest moves are likely part of a larger strategy to focus on higher-end prepaid as it discards low-end users.

“We did launch some new prepaid pricing, and we saw a double amount of our postpaid subscribers move over to our prepaid more than we've seen in history and that accounted for a little less than 50 percent of our prepaid net adds this quarter,” Verizon CFO Fran Shammo explained two weeks ago. “So we did see some shift in our base, but the good news there is, is that we didn't lose the customer. We maintained the customer at least on the Verizon wireless network.”