Emphasizing the importance of the prepaid market, or at least the intense competition that segment is currently experiencing, nationwide powerhouse Verizon Wireless rolled out new offerings emphasizing the evolving nature of wireless usage while regional wireless operators U.S. Cellular (USM) and Atlantic Tele-Network (Alltel Wireless) (ATNI) announced a partnership to offer Alltel’s U Prepaid service in approximately 500 Walmart locations across 18 states beginning next month.
Verizon Wireless said beginning next month it will begin offering unlimited talk, messaging and 1 gigabyte of data transmission for $80 per month without a contract. The carrier’s current prepaid package for smartphones charges $125 per month for unlimited calls, messaging and “unlimited” data. The new offering also undercuts the $120 per month it charges for contract customers signing up for unlimited calling, messaging and 2 GB of data transmission.
The new offer is tied exclusively to the Samsung Illusion smartphone that runs Google’s Android operating system and will retail for $170. Verizon Wireless currently offers the Samsung Illusion for free to contract customers that sign a two-year agreement with a required data package. The device relies on the carrier’s CDMA2000 1x EV-DO Revision A network for data connectivity and is not compatible with its LTE network. The least expensive Android-powered smartphone currently offered through Verizon Wireless’ prepaid offering is the Sony Ericsson Xperia Play that retails for $215.
The new package will initially be available through the carrier’s direct channels, with future distribution scheduled for Best Buy, RadioShack, Target and Walmart retail locations.
In addition to the smartphone package, Verizon Wireless will also begin offering prepaid data through an LTE-enabled mobile hotspot device. That service will include 250 megabytes of data transmission for one week for $15; 3 GB of data transmission for one month for $60; or 10 GB of data transmission for one month for $90. The offering will be supported by the Novatel Wireless JetPack device retailing at $130. That same device is available for free for contract customers. Contract customers are offered 5 GB of data for hotspot devices for $50 per month and 10 GB for $80 per month.
Regional partnership
U.S. Cellular and Alltel said their partnership will run across either carrier’s network depending on where the customer is located. The service offering will include four handsets, including a Samsung smartphone running Google’s Android OS, a pair of LG feature phones with QWERTY keyboards and a basic Samsung device.
Details on the rate plans were not released, though the companies said there would be a “variety” to choose from that would include “multiple” data options and plans that include unlimited talk and texting. All plans are to include nationwide coverage with no roaming charges.
“Teaming with Alltel to gain distribution in Walmart gives us another opportunity to be where our customers want to shop and to offer more customers a prepaid service that helps them control their monthly budgets,” explained Carter Elenz, EVP of sales and customer service for U.S. Cellular, in a statement.
“Together, we can leverage our position as the “local” wireless carrier offering a hometown alternative in the communities we serve,” added Lesa Handly, chief marketing officer for Alltel Wireless.
(View Atlantic Tele-Network CEO Michael Prior discuss the current competitive market during the recent Rural Cellular Association Spring Expo.)
The move could also help both operators shore up their respective prepaid offerings. Alltel lost more than 70,000 prepaid customers last year, though did manage to add 1,189 net prepaid customers during the final three months of last year. Overall, the carrier lost more than 135,000 subscribers last year.
U.S. Cellular lost 8,000 prepaid customers last year, but managed to turn around a loss of 26,000 during the first half of the year with a net gain of 18,000 subscribers through the second half of 2011. Overall, U.S. Cellular said it lost 186,000 customers last year.
While the carriers only mentioned the prepaid partnership, the deal could also signal a potential closer relationship between the operators. Both operate CDMA-based networks with U.S. Cellular in the process of rolling out LTE services. Alltel has hinted in the past that it would be interested in eventually rolling out LTE services.
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