Verizon Wireless (NYSE:VZ) is testing a $50 prepaid monthly unlimited plan across the Southeast.
Verizon spokeswoman Brenda Raney confirmed separate reports about the company's trial offering. According to Prepaid Reviews and BTIG analyst Walter Piecyk, Verizon started testing the prepaid plan earlier this week in at least 11 states in the Southeast. The plan, which is being dubbed the "Southeast save program," according to Piecyk, is only open to subscribers who have been targeted with text message and email campaigns. The service includes unlimited voice and texting, but has no data option included.
Raney said that the trials are "a special, limited-time offer to select prepay customers." She declined to provide other details about the trials.
"We suspect that in Q2 Verizon came under more pressure in its prepaid business from the increased competition over the past year," Piecyk wrote. "MetroPCS might be having increased success against Verizon in these markets. We think prepaid subscriber losses are likely to increase on a sequential basis when Verizon reports Q2 results tomorrow."
Interestingly, TracFone rides on Verizon's network for its Straight Talk service. Straight Talk offers a $45 plan with unlimited voice, texting and data. The Straight Talk service continues to perform well, Piecyk said, adding that "we estimate that by the end of the year, Straight Talk will be generating more revenue and profit for Verizon than its own prepaid business."
Verizon added 1.6 million net new customers in the first quarter, bringing its total subscriber base to 92.8 million. However, it added just 423,000 retail postpaid customers in the quarter.
The prepaid market has grown more crowded in recent months, with Sprint Nextel (NYSE: S) introducing several new brands into the mix. Its relaunched Virgin Mobile USA brand has a plan for $40 per month that offers unlimited messaging, email, data and Web access with 1,200 voice minutes. Sprint is also still touting its Boost Mobile $50 monthly unlimited service, which can now run on Sprint's national CDMA network (previously Boost was limited to Sprint's iDEN network).
For more:
- see this Prepaid Reviews article
- see this BTIG research note (sub. req.)
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