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Verizon Wireless goes down low cost road

Introduces its cheapest plan at $35, as prepaid market expands and it frees up affordable capacity in its CDMA network


Published: 12 April, 2013

READ MORE: Spectrum | US | Verizon Wireless | CDMA

There are signs that Verizon Wireless, the king of high value contracts, is somewhat worried by the probable combination of Sprint and MetroPCS. The firm has announced a highly uncharacteristic $35 prepaid plan to target the budget cellcos.

Although Verizon and AT&T have prepaid customers, they have stayed largely aloof from the increasingly intense price scrabble at the low end, where Sprint's multiple brands have taken on the traditional pay-as-you-go majors (including TMo and MetroPCS, as well as Leap). As of the end of last year, Verizon had 5.7m prepaid customers in a total of 98.2m retail users.

The new plan is the cheapest offering in Verizon Wireless's portfolio and, according to FierceWireless, provides unlimited SMS and web surfing, but only 500 voice minutes, on basic handsets. There is a choice of four featurephones - the LG Cosmos 2 and Extravert, and the Samsung Gusto 2 and Intensity III.

This sees the carrier moving lower down the prepaid market than before - its recent activities there have been focused on second devices/accounts like tablets, and firmly on the $50-and-above price range. Like Sprint, which used its increasingly empty iDEN network to support low cost Boost Mobile flat rate services in recent years, Verizon is likely looking for a way to fill up its CDMA 1X 2G capacity in the period before that gets converted to LTE. About half its data traffic now runs on its new 4G network.

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