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Fiercewireless.com: “Verizon cuts daily prepaid plan to $1.99” … “to slow the carrier’s prepaid customer losses”

December 9, 2010

As Verizon lowers pricing on their prepaid “to slow the carrier’s prepaid customer losses,” that alerts their contract customers to how expensive their contracts really are.  And that results in more customers leaving for prepaid.  They can’t have it both ways, which is why EVERYONE will be on prepaid soon.  LightYear is ready to help them switch.

The quoted analyst observed, “The fact that it (Verizon) restricts its available handsets with its daily plans is a clear indication that it’s preventing any possible cannibalization from customers in higher-end plans,” but that’s a futile move.  Do you see their conundrum? They’re painting themselves into a corner.  It’s also comical to note that Verizon was forced to match AT&T’s prices, which are the highest of all the serious prepaid players (which does not include Verizon).

Two other key quotes:  “In the third quarter Verizon lost 137,000 prepaid voice subscribers” and “The prepaid sector continues to gather speed …”  Red highlights and bolding are mine.
JC

http://www.fiercewireless.com/story/verizon-cuts-daily-prepaid-plan-199/2010-12-08

Verizon cuts daily prepaid plan to $1.99
December 8, 2010 — 2:15pm ET | By Mike Dano

Verizon Wireless (NYSE:VZ) cut the price of its daily prepaid voice plan in half, a move likely geared to slow the carrier’s prepaid customer losses and address increasing competition in the space.

As highlighted by research firm Current Analysis, Verizon on its website now charges $1.99 per day for daily prepaid wireless service, which allows users to place unlimited calls nationwide. Previously, the operator charged $3.99 per day for the service. (Interestingly, Verizon concurrently doubled the price of text messaging for subscribers of its prepaid daily plan, from 1 cent to 2 cents per message.)

Verizon, the nation’s largest wireless carrier, also offers a prepaid daily plan at 99 cents that includes unlimited mobile-to-mobile calling and additional minutes at 10 cents each, as well as a 25-cents-per-minute option.

According to Current Analysis, the plans are only available on Verizon feature phones.

Verizon’s pricing tweaks bring the carrier’s daily prepaid pricing option closer to the options offered by Verizon rival AT&T Mobility (NYSE:T). AT&T, the nation’s second largest wireless carrier, on its website charges its GoPhone prepaid users $2 per day for unlimited talk and text.

“The new plan portfolio was simplified and I think it’s a direct response to AT&T’s plan enhancement done in October,” wrote Current Analysis’ Maidy Whitesell. “The fact that it (Verizon) restricts its available handsets with its daily plans is a clear indication that it’s preventing any possible cannibalization from customers in higher-end plans. Overall, I think the move is positive because the carrier wants to be competitive in the prepaid arena, but it does not seem that its ready to compete in terms of pricing, at least not yet.”

In the third quarter Verizon lost 137,000 prepaid voice subscribers, and its total prepaid subscriber base at the end of the quarter clocked in at 4.4 million. The prepaid sector continues to gather speed as providers including TracFone, MetroPCS (NYSE:PCS) and Leap Wireless (NASDAQ:LEAP) lower prices in an increasingly heated battle for shoppers wary of signing a two-year contract.

For more:
– see Verizon’s website

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