Verizon prepaid customers blowing through data buckets can now continue to access lower speed data services at no charge
At least one feature from Verizon Wireless’ recent overhaul of its postpaid rate plans has trickled down to its prepaid service.
The carrier today said customers selecting any of its branded prepaid rate plans would be allowed to continue accessing data services at a reduced speed for no additional fee once they deplete their included data allotment. The data speed reduction will see network speeds limited to 128 kilobits per second, which the carrier noted was still fast enough to handle many basic mobile web functions.
The feature is similar to the “Safety Mode” option added to postpaid rate plans earlier this month, which the carrier said was enabled by throttling LTE network speeds and not actually moving the customers off of the LTE network to Verizon Wireless’ legacy CDMA-based 2G or 3G service. As part of the postpaid plan overhaul, Verizon Wireless also added more data in each bucket, a “Carryover Data” option and a North American roaming feature. Pricing also changed, with overall charges increasing, though the per-byte rate on data falls.
Most of Verizon Wireless’ rivals offer a similar data-speed throttling for customers that use up all their high-speed data allotment.
Verizon Wireless in early May solidified promotional prepaid plans that include three tiers priced at $30, $45 and $60 per month. The entry level plan includes unlimited domestic calling, unlimited text messaging across North America and a reliance on Wi-Fi for data. The $45 per month plan throws in three gigabytes of cellular data for customers signing up for an Auto Pay service, or 2 GB without; while the $60 per month plan bumps the data up to 6 GB with Auto Pay, 5 GB without, and throws in unlimited calling from the U.S. to Mexico and Canada.
The move appears to be further appeasement to the prepaid market, which continues to stump Verizon Wireless. The carrier said it lost 177,000 direct prepaid customers during the first three months of the year, which continued a long string of customer losses in the segment. By comparison, rivals T-Mobile US and AT&T Mobility posted robust prepaid growth across their MetroPCS and Cricket Wireless divisions during the quarter.
The competitive disadvantage on the surface did not appear to concern Verizon Wireless management, with Verizon Communications CFO Fran Shammo stating the carrier was happy to have its wholesale partners target prepaid customers.
“We’re really not competitive in that environment for a whole host of reasons,” explained Shammo, as part of the carrier’s Q1 earnings call. “And it’s because we have to make sure that we don’t migrate our high quality postpaid base over to a prepaid product. If you look at the competitive nature, they’re doing it with sub-brands. They’re not really doing it with their brands. And quite honestly we use the TracFone brand as our prepaid product. And TracFone has been extremely successful for us. It’s not something that we disclose any more on reseller. But it continues to increase on the high quality base of TracFone. So that’s really where we use and go after the prepaid market.”
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