Verizon Wireless cuts data bucket rates; Sprint lumps Apple lease deals
Two weeks after stating it would not chase low-value customers, Verizon Wireless is set to make cuts to data-bucket pricing ranging from $5 to $10.
The move will see the carrier’s current 1 gigabyte data bucket fall from $40 to $30 per month, with similar $10 cuts at the 2 GB, 3 GB, 4 GB, 6 GB and 20 GB levels. The current 8 GB plan will witness a $5 cut to $85 per month. All the mentioned plans include unlimited domestic voice calling and text messaging, with a varied per-line access charge depending on the device. The carrier claimed the move was a way of offering more data for the same price.
The move follows Verizon Wireless reporting an increase in customer churn during the fourth quarter, which the carrier attributed to increased competition in the mobile space and the carrier’s unwillingness to chase customers.
“So what that means is at a 1.14% churn rate, you should take that as we did not go to places where we did not financially want to go to save a customer,” said Verizon Communications CFO Fran Shammo. “And there’s going to be certain customers who leave us for price and we are just not going to compete with that because it doesn’t make financial sense for us to do that.”
T-Mobile US earlier this year reported partial Q4 operating results showing it had matched Verizon Wireless for connection growth during the quarter, but far surpassed its larger rival in terms of higher-value smartphone connections. T-Mobile US also said that the 1.4 to 1 positive porting ratio with Verizon Wireless it witnessed during the final three months of last year had continued into the beginning of 2015.
While Verizon Wireless’ latest pricing moves were seen by some as a sign of desperation, they pale in comparison to moves made ahead of the 2014 holiday shopping season. Verizon Wireless, in countering adjustments made by AT&T Mobility, increased the amount of shared data on a pair of plans, including the $80 plan that saw its data bucket increase from 6 GB to 10 GB, while the $100 per month plan will grow from 10 GB to 15 GB. Both of those plans are set to expire with the introduction of the new pricing cuts.
Sprint bolsters Apple play
Sprint strengthened its play for the hearts of Apple fans, announcing a combination of previously separate device lease offers. The carrier is now allowing customers to combine lease deals for an Apple iPhone 6 16GB and an iPad Mini 3 16GB with corresponding rate plans for $100 per month.
The plans include Sprint’s already offered iPhone unlimited plan priced at $50 per month and a 2 GB data plan for the iPad Mini for $30 per month. The device lease portion sees a discount from a combined $37 down to $20 per month. The carrier also is waiving activation fees on both devices through the offer’s limited run.
Sprint’s device leasing program lets customers pay a monthly fee for select mobile devices that is typically lower than similar device payment programs.
Sprint last month launched a promotion targeting T-Mobile US customers by promising a guaranteed $200 trade-in credit for their T-Mobile US device if they switch their service over to Sprint. Sprint also continues to offer to pay up to $350 in credit to any customer that brings their number to the carrier from Verizon Wireless, AT&T Mobility or T-Mobile US.
Sprint earlier this year announced preliminary operating results for the final three months of 2014, which included nearly 1 million direct net customer additions. The reported growth was a strong turnaround from the previous quarter in which Sprint lost 336,000 postpaid and 20,000 prepaid customers, numbers that were somewhat offset by gaining 840,000 connections via its wholesale and affiliate channels. Year-over-year, Sprint doubled the 477,000 net customer additions it posted for the final three months of 2013, which were mostly on the back of its direct prepaid operations as well as continued growth from affiliates and wholesale partners.
Sprint is scheduled to announce full quarterly results on Feb. 5.
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