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Verizon's Stubborn Refusal To Compete In Prepaid Space
Competing on price would apparently be beneath their station...
by Karl Bode Thursday 02-Sep-2010 tags: business · wireless · alternatives · bandwidth
Verizon has so far shrugged off the idea of offering unlimited, pre-paid broadband service, and their recently unveiled $80 for 5GB prepaid plan looks ridiculously uncompetitive next to new offers from Virgin Mobile, Clearwire's new Rover prepaid brand, Millenicom and soon, MetroPCS' looming prepaid LTE services. One analyst tells Light Reading that Verizon's reluctance to compete in the space is because once they begin competing on price -- they'll have to continue to do so:

"When you lump Verizon and AT&T together, and you own 60 percent of the mobile market, and there are these little companies with 10 percent of your subscriber count who are coming in with lower pricing plans, you can't afford to drop your prices," Bluestein says. "It will be a world of hurt when you have that kind of share. Strategically it makes sense that they would do anything to avoid competing pricewise and valuewise.

As such, Verizon will be throwing a limited number of prepaid-fueled Droid, Palm and Blackberry handsets at the problem. Verizon and AT&T have been able to avoid taking a hit from this prepaid space because of coverage -- and because they've generally had a better selection of handsets, though this is slowly changing. As handset availability broadens and Verizon and AT&T make their hard turn toward the postpaid low caps and high overage plan pricing model, a growing number of users may find prepaid appealing.

Update: Of course if you're Verizon, you might not need to bother competing in the space, given the kinds of problems users are having with Virgin Mobile's newest prepaid offer.

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Transmaster
Don't Blame Me I Voted For Bill and Opus

join:2001-06-20
Cheyenne, WY

And in January the iPhone

With all of this and we think Verizon is going to be any better for people who want a alternative to AT&T.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: And in January the iPhone

and you keep thinking that the iPhone is going to VZ.

Transmaster
Don't Blame Me I Voted For Bill and Opus

join:2001-06-20
Cheyenne, WY

Re: And in January the iPhone

said by hottboiinnc:

and you keep thinking that the iPhone is going to VZ.
That is right, all of the information coming out of China is pointing in this direction.

Gorehound you need to make up a anti Apple rant form on Word so you can save yourself the time typing in the same crap everytime Apple anything is mentioned here, a simple paste job will do the trick. Gorehound I have a hunch you don't actually have any Apple equipment do you. Right now I am enjoying Buddha Bar VI Rebirth CD1 on my iPod Touch 2G
--
I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's.
- Mark Twain in Eruption
gorehound

join:2009-06-19
Portland, ME
i won't be buying an itoilet.i own a nice samsung cell phone and that is what i use it for.
i use a computer for my email/internet and an mp3 player for my music.

BF69
Premium
join:2004-07-28
Camden, TN

As long as Sprint, T-Mobile, Virgin etc

refuse to go outside the big cities Verizona doesn't have to compete on price. Sure $40 for unlimited sound great IF you can get it. And that's the rub. Verizon is the only carrier that offers 3G in my area. Not even at&t offers it. So why should they compete on price? When you're a monopoly you don't have too.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
Reviews:
·WOW Internet and..
·Time Warner Cable

Re: As long as Sprint, T-Mobile, Virgin etc

maybe all of DSLR should pay Sprint to move into your area so we don't have to keep reading your posts about how VZ is the only one there and blah, blah, blah... Did you ever stop to think that the only reason VZ is there is due to the fact that they bought out a company that already offered service there many many many years ago?
--
www.twopugsbrand.com Kosher, Vegan, and Organic Certified Dog and Cat treats/foods and other products! www.etsy.com/shop/snakx4u/ Organic, Kosher, Gluten Free, Vegan Human Baked Goods

BF69
Premium
join:2004-07-28
Camden, TN

1 edit

Re: As long as Sprint, T-Mobile, Virgin etc

said by hottboiinnc:

maybe all of DSLR should pay Sprint to move into your area so we don't have to keep reading your posts about how VZ is the only one there and blah, blah, blah... Did you ever stop to think that the only reason VZ is there is due to the fact that they bought out a company that already offered service there many many many years ago?
A) first of all I'm making a valid point that is germaine to the topic.

B) If you really hate my annoying posts just use the IGNORE feature. No one is "forcing " you to keep reading my posts. You clearly have an option to avoid seeing them at all. If you refuse to take such option I suggest shutting the hell up about my posts.

Camelot One
Premium,MVM
join:2001-11-21
Austin, TX
kudos:1

Virgin Mobile is just not a Verizon competitor

I was a virgin mobile user for years, and (back then) they were a great company. But they just don't have the coverage. They are a nice, low cost option IF you are in a Sprint digital area, and don't plan on leaving it. Their broadband is decent, if you are sitting outside, next to a sprint tower.

But for everything else, you need the coverage Verizon offers. They know this, and they can get away with charging insane prices for it. At least until someone other than a Sprint reseller tries to compete nationwide, or virgin mobile releases phones that can roam on other networks.
guppy_fish
Premium
join:2003-12-09
Lakeland, FL
kudos:1
Reviews:
·Verizon FiOS

Karl, 100% wrong

They do compete, very well actually, they are the service provider for Page Plus

So they get most the revenue and let a 3rd party deal with the customer support, billing or worring about the phones...

As for the 40$ one, Page plus has had that for over 1.5 years, all on Verizon's network

Karl Bode
News Guy
join:2000-03-02
kudos:29
Host:
Road Runner
PC gaming GAMES
PC gaming Tech

4 edits

Re: Karl, 100% wrong

Sort of, but a non-owned MVNO isn't the same as directly competing in the space. Especially with such a lovely, microscopic collection of largely clamshell phones:

»www.pagepluscellular.com/Online%···nes.aspx

And maybe I missed it, but they don't appear to offer data?
guppy_fish
Premium
join:2003-12-09
Lakeland, FL
kudos:1
Reviews:
·Verizon FiOS

Re: Karl, 100% wrong

You missed it, any Verizon phone works on PagePlus including data phones. What PP sells is for people who need a phone, most either have one or find alternate places to buy

My thought is this is more profitable for Verizon, its doesn't tarnish or cannibalize there brand but keeps the revenue from people ( like me ) that like prepaid.

Its 100% Verizon service, including the back-end like voice mail
glinc

join:2009-04-07
New York, NY

Re: Karl, 100% wrong

Too bad page plus doesn't offer family plans. My 5 lines Talk & Text 1400 + 20% off primary is cheaper than going with 5 page plus plans.

Karl Bode
News Guy
join:2000-03-02
kudos:29
Host:
Road Runner
PC gaming GAMES
PC gaming Tech

2 edits
Interesting. I'd never heard of them. I guess a non-Verizon-owned MVNO could vaguely be considered competing in the space, but isn't what the analysts in the linked articles are talking about (Verizon competing in the space directly). I think you're right about Verizon wanting to protect the brand from a lower value perception though.
SunnyD

join:2009-03-20
Madison, AL

Re: Karl, 100% wrong

Currently running a Moto Droid and a Droid Eris on PagePlus. Limited data cap (50mb max), but it's not a big deal for the most part.

Karl Bode
News Guy
join:2000-03-02
kudos:29

Re: Karl, 100% wrong

50 MB data cap on all plans? I still don't see data pricing on their website...
JazzJRabbit

join:2003-09-27
Naperville, IL
Reviews:
·WOW Internet and..

Re: Karl, 100% wrong

That's because they do not offer data. Page Plus offers good pay-as-you-go rates and good 1200 minute/unlimited talk & text plans at $30 and $45 respectively, but data is their Achilles heel. Absolute max is 50Mb data allowance on 1200 minute plan after which I believe you pay some outrageous amount per megabyte.

I'm using Page Plus pay-go plan, but I really wish they offered data plan add on to their phones at reasonable rates, say 500MB-1GB for $5-10 per month. That would allow me to stay on pay-go plan while giving me access my email and send free texts with google voice. My only hope is that as 4G/LTE and data in general become commonplace verizon will resell data to Page Plus and other resellers at good rates. But I think we'll have to wait a really long time for it, years at least.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
Reviews:
·WOW Internet and..
·Time Warner Cable
Page Plus is an Indian owned company based in a small burb called Holland just outside of Toledo, Ohio (Home to Block Communications).

They've been in the business for YEARS! and are NO Way owned by VZ. They only are an MNVO.
--
www.twopugsbrand.com Kosher, Vegan, and Organic Certified Dog and Cat treats/foods and other products! www.etsy.com/shop/snakx4u/ Organic, Kosher, Gluten Free, Vegan Human Baked Goods

Onedollar

join:2001-08-27
Pomona, CA
kudos:6

1 edit
Just switched to page plus last month. It is perfect for low voice usage peeps. Also good for people who are expiring at the end of their contract.

They also have a 45 buck a month unlimited voice and text, with 20mb data? All on VZ towers

Just need to have a clean CDMA phone
JazzJRabbit

join:2003-09-27
Naperville, IL

Re: Karl, 100% wrong

20, not 200
reedsr12

join:2008-03-08
Terre Haute, IN
I am using a Moto Droid on Page Plus currently. The data is limited but careful use and Wifi in most of the places I spend my time saves me a ton of cash each month over the verizon plans.
jsb825
Premium
join:2003-10-08
Exeter, NH

$40 - you get what you pay for - nothing!

Virgin mobile doesn't work. Half of its customer base on the new $40 plan can't even surf to a web site 90% of the time. Of course I know this cause I am one of them. They have not called me back and they claim that though I am in a good signal area, that it may have something to do with my computer.. hahahahahaha BULL SNOT!!!

crm114

@lmco.com

Re: $40 - you get what you pay for - nothing!

We all know that Virgin Mobile was bought by Sprint, therefore its no suprise we're working off the Spring 3G network. I got the VMU MiFi Friday and for the duration of the Labor Day weekend the service did stink on ice. Could barely get 200k downloads. Tech support was basically useless once you go off script (ie, you have paid your bill and you are in a good coverage area). However, as of this morning I am getting close to AT&T 3G speeds (1M down/ 600K up) which is close enough to VMU's webpage claim of typical speeds of 600K to 1.6M. I'm tweeting my speed tests as @crm114org if you're interested to see how the service here in Orlando is.
QLR

join:2009-06-23
Tallahassee, FL

Page plus isnt owned by verizon

Page plus isn't owned by Verizon they just use their towers and other services. Like straight talk.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·Verizon FiOS

side lines and unlimited data

Verizon's watching companies try this unlimited data thing and having it be a complete failure... Meanwhile Verizon's network in a premium price structure works great...

The existing digital cellular network wasn't built to sustain high speed on a continuous high-volume customer basis. Verizon's made change$ to make it work... pricing is one part, but not the whole thing-- they've actually make the network much more redundant in places where it needs to be. Can you say that about the other carriers? NO for at&t, NO for sprint, NO for tmobile, and any other smaller carrier.. you must be joking about them actually spending $BILLIONS$ to get the revenue back $40 a month per customer.

I'm not saying I'd subscribe to either service because I don't need data everywhere I go.. limited destinations is fine with me (as in FREE or value-added wifi on a non-cellular SMART device). You all can be the early adopter guinea pigs for the carriers to get it right.
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
Reviews:
·CenturyLink
·Comcast
·Embarq Now Centu..
·Millenicom

Bell Heads!

Between Vodafone and the other major stock holders, Verizon Wireless appears to be managed by Bell Heads with a monopolistic view on competition. Many if not all Verizon prepaid broadband customers will not be able to obtain service when not in a Verizon Service Area.

Things were different in the 1990's when there were usually many dial up internet providers in a large city. If customers were not satisfied with an ISP they were able to dump them and sign up with another ISP. As a EX-ISP insider I observed the reaction of upper management's response to competition. They were pissed off when the competition forced them to upgrade their Points of Presence to meet the other local ISP's speed increases or connect time allowance in their market.

With the wireless broadband duopoly there is no incentive for ISP's to compete based on lower price or upgraded technology. I said duopoly because the broadband small fry like Sprint and T-Mobile do not have the market presence to impact the parasitic pair.

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