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Verizon Plans to Offer Unlimited Data to Prepaid Customers

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Looking for growth through online video and ad placing.Photograph by Eric Thayer—Getty Images

Verizon wireless customers who pre-pay for monthly service will be able to opt for an unlimited data plan starting on Tuesday.

But the new plan doesn’t come with a discount, a big departure from what is typical for prepaid service. Customers who sign up for the plan will pay the same $80 per month as customers of Verizon’s regular unlimited monthly plan.

The new prepaid plan also has a few other missing features because it doesn’t include the ability to share an Internet connection with a tethered laptop, doesn’t have multi-line discounts, and doesn’t include high-definition video streaming.

Verizon said the prepaid plan is aimed at giving customers more options to pay for their plans rather than trying to entice them with bargain rates. Since prepaid customers pay in advance, Verizon can also extend the offer to people with poor credit histories.

“Customers are increasingly demanding choice,” Tami Erwin, executive vice president for operations at Verizon, tells Fortune. “Prepaid isn’t just that thing you put in the back room to have in case someone failed a credit check.”

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Verizon, which is struggling to retain wireless customers amid fierce competition over unlimited data plans, hasn’t been a strong player in the prepaid market in the past. Of the carrier’s 113.9 million retail customers, only 5.4 million were on prepaid plans at the end of the first quarter. Other carriers run dedicated prepaid brands, like AT&T’s (T) Cricket and T-Mobile’s (TMUS) MetroPCS, with a targeted pitch aimed at bargain hunters and consumers who can’t spend as much on wireless. T-Mobile had 20.2 million prepaid customers at the end of the quarter, for example.

Verizon last year revamped its prepaid line up with more data plans, but has yet to attack the market aggressively. Tuesday’s announcement was more of a limited step to improve the carrier’s current line up. It will not be accompanied by a major marketing campaign, but will be advertised mainly online, Erwin said.

Ads will be “very targeted,” though some cities may get broader advertisements like billboards if they’re considered particularly good for Verizon’s target demographic, Erwin said. The new Verizon (VZ) prepaid unlimited plan doesn’t have a family plan option, so it’s best suited for college students or recent college graduates, she said. The carrier may therefore target more advertising in college towns or similar area.