Verizon Wireless targets prepaid rivals in select markets

While the mobile market is indeed international in scale, don’t think carriers ignore local issues. A perfect example is a prepaid offering Verizon Wireless (VZ) unveiled last week in the Southern California and select Florida markets that looks to compete against similar offerings from the likes of MetroPCS Communications Inc. (PCS), Leap Wireless International Inc. (LEAP) and Sprint Nextel Corp.’s (S) Boost Mobile offering.
The plan, dubbed “Unleashed,” offers unlimited calling, messaging and unlimited mobile Web services over Verizon Wireless’ network for $50 per month. One limitation to the plan, besides the geographic availability, is that only three handsets are being offered; two messaging phones with QWERTY keyboards and a flip phone. The other limitation is that the mobile Web experience is limited to the Web browser included on the feature phones and is not a full Web browsing experience.
The geographic limitations are somewhat obvious as MetroPCS, Leap and Boost Mobile all offer their similar, no-contract unlimited services in the Southern California and Florida markets, as well as nationwide coverage through roaming agreements in the case of MetroPCS and Leap and Sprint Nextel’s native coverage in the case of Boost Mobile. Those operators do maintain an advantage in offering customers smartphones through their services that include a fuller Web browsing experience as well as access to application stores.
The Unleashed plan undercuts Verizon Wireless’ more widely available prepaid plans that offer unlimited calling for $2 per day, with text messages charged at 2 cents each or unlimited bundles for $10 or $20 per month. The Unleashed plan is priced at a $5 per month premium over Tracfone Wireless Inc.’s Straight Talk offering that includes unlimited calling, messaging and data using feature phones and running over Verizon Wireless’ network.
Perhaps more importantly for Verizon Wireless, the Unleashed plan undercuts AT&T Mobility’s GoPhone unlimited plans that are priced at either $60 per month for unlimited voice calls and text messages or $75 per month with the addition of 200 megabytes of data transmission. AT&T Mobility also has GoPhone plans for smartphones priced at $2 per day for unlimited calls and text messages and data packages ranging up to $25 per month for 500 MB of throughput.
Verizon Wireless has typically stayed away from the price war it the prepaid space deciding instead to partner with resellers like Tracfone or focusing its efforts on the more lucrative postpaid market.