Confirmed: Verizon testing sales of prepaid service through exclusive dealers

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Verizon has corroborated reports from Wave7 Research that it is selling prepaid services through some exclusive dealers.

Verizon confirmed to FierceWireless that it is selling prepaid services through some exclusive dealers.

“We are currently testing out a new concept with exclusive prepaid dealers. We are learning a lot from the trials and are always looking for ways to increase our prepaid market share,” said Verizon spokesperson Kelly Crummey.

Crummey’s comments corroborate reports from Wave7 Research about Verizon’s prepaid efforts.

“Verizon is now launching dealerships that exclusively sell Verizon prepaid,” Wave7 wrote in a recent report. “There are now two such stores in Las Vegas, two in the Phoenix area, and one in Socorro, TX, with efforts to launch exclusive dealerships afoot in New York. All five of these stores are run by a dealer known as My Peak Wireless and the Nevada stores have been open for about a month.”

“Verizon is attempting to boost prepaid share via this as well as launching more generous plans (the newish $50 and $70 plans), doing heavy advertising since May 2016, and a Walmart-exclusive plan launched last fall,” explained Wave7’s Jeffrey Moore.

Indeed, Verizon has been making progress on the prepaid front in recent months. During the company’s third-quarter results, Verizon reported that its net prepaid additions increased to 83,000 for the quarter, a significant improvement from past results.

“So we did launch some new prepaid pricing and what we did see was, 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% of our prepaid net adds this quarter,” Verizon’s Fran Shammo said of the carrier’s prepaid results during the third quarter, according to a Seeking Alpha transcript of the carrier’s third-quarter conference call with investors. “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.”

Verizon’s third-quarter results in prepaid are far better than what Verizon reported in its first-quarter results in April. Verizon lost 177,000 net retail prepaid users in the first quarter, which actually marked a slight improvement compared to the 188,000 it lost during the same period last year. In fact, during the carrier’s first-quarter call, Shammo said Verizon was relying on its MVNO agreement with America Movil to target the prepaid space: “If you look at the competitive nature, (other providers) are doing it with sub brands," Shammo said. "They are not really doing it with their brands. And quite honestly, we use the TracFone brand as our prepaid product."

America Movil, the South American telecom provider owned in part by billionaire Carlos Slim, operates a number of brands in the U.S. market like TracFone and Straight Talk. The company uses service from a range of carriers, including T-Mobile and Verizon.

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