Verizon hones prepaid focus with new $40/month 2 GB plan

Sign outside a Verizon Wireless store
Verizon added a low-end plan for prepaid users.

Verizon added a plan for low-end prepaid users as the carrier continues to take aim at a market it had largely ignored until recently.

Prepaid users can now spend $40 a month for 2 GB of high-speed data as well as unlimited text and voice. Verizon also offers a 5 GB prepaid plan for $50 a month and a 10 GB plan for $70 a month; all three plans also include international text to more than 200 countries and data rollover for users who pay on time.

“We’re making it simpler for our prepaid customers to enjoy all of the benefits of a network that can keep up with their digital lifestyles,” said Ron Zanders, Verizon’s director of prepaid, in Verizon’s announcement. “Whether you use a little data or a lot of data, we’ve got a prepaid plan that fits your needs.”

All Verizon’s prepaid data plans include Always-On Data, which throttles speeds to 128 kbps after users have exceeded their monthly allotments. Verizon also offers a $30-a-month basic prepaid phone plan with unlimited talk and text.

AT&T’s Cricket, T-Mobile’s MetroPCS and Sprint’s own branded prepaid business all offer 3 GB of data for $40 months, so Verizon clearly isn’t looking to compete on price here. But the new plan may appeal to prepaid users who don’t need much data but want the coverage Verizon’s extensive network offers.

Regardless, the new plan underscores how Verizon’s prepaid strategy has shifted dramatically in recent months. Less than a year ago then-CFO Fran Shammo conceded that Verizon wasn’t competitive in prepaid out of fear of cannibalizing its lucrative postpaid base, adding that TracFone—which offers service through every U.S. network operator—had become its de facto prepaid brand.

The nation’s largest carrier began to reverse course later in the year, though, doubling prepaid data allotments in May and quietly launching VoLTE for prepaid users in August. And those moves are paying off: Verizon said last month that it saw a net loss of 9,000 prepaid users in the final quarter of 2016, a marked increase over the 157,000 it lost during the same period in 2015. And the carrier said it is “seeing sustained year-over-year improvement in retail prepaid.”