Verizon lowered the price of entry to its top-rated wireless network, but only for prepaid customers. The carrier said this week it will add a new prepaid plan starting at $40 a month, $10 less than the current lowest-priced plan it sells.
The new plan includes two gigabytes of data per month, compared to five gigabytes available on its existing $50 prepaid plan. Consumers who opt for prepaid plans pay upfront each month, instead of getting a bill and paying later. Verizon’s cheapest regular monthly plan starts at $55 per month for 2 GB.
Still, the $40 starting point is higher than some competitors charge for their lowest-priced prepaid plans. Sprint’s (S) Boost Mobile unit sells a 2 GB plan for $30 a month, while AT&T’s (T) Cricket Wireless and T-Mobile’s (TMUS) MetroPCS brands each offer 1 GB for $30.
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Verizon’s move is the latest in a wireless market that is increasingly splitting its offerings between family plans and other high data-need consumers versus individuals with lesser needs or lower budgets. T-Mobile phased out its least expensive regular monthly plans, for example, leaving customers to opt for an unlimited plan starting at $70 for the first line or switch to its prepaid offerings via its MetroPCs brand.
By relying on separate prepaid brands to go after the most cost-conscious consumers, the carriers are hoping entice family plan and heavy data users to spend more.
Regardless of the various branding strategies, however, consumers in both categories are benefitting from increasing competition. Since Sprint and T-Mobile introduced lower priced unlimited data plans last summer, AT&T and Verizon have been forced to match with plans that also killed the hated data allowances, though at slightly higher prices. All of the plans include a soft limit on data usage, ranging from 22 GB to 28 GB per line, which can result in slowed data rates if exceeded.
At the lower end, carriers have been cutting prices on prepaid plans, as well.
Verizon’s (VZ) mobile network retains the highest overall rating among the four major carriers, followed by AT&T, according to data from Rootmetrics, which runs independent tests of the networks around the country. Sprint and T-Mobile argue that their networks have closed the gap, at least in more densely populated areas, citing other figures.