By Alexandra Burlacu email: firstname.lastname@example.org | Feb 03, 2013 10:01 PM EST
Verizon Wireless just launched two cheaper prepaid plans with unlimited talk and text messaging, in an effort to better compete in the pay-as-you-go phone market.
Smartphone users on a budget can now choose between two lower-priced prepaid plans. The first one costs $60 per month, while the second goes up to $70.
The $60 plan offers unlimited talk and text, as well as 500MB of data. For an extra $10, users can get 2GB of data in addition to unlimited talk and texts. Before these two new prepaid plans, Verizon's prepaid offering consisted of 2GB of data and unlimited talk and texts for $80 a month (the plan that is now $70).
As one may expect, however, there's a catch: the plan only covers 3G phones that run on Android, iOS, or BlackBerry handsets. Such phones include the Samsung Illusion, HTC Droid Incredible 2, as well as most BlackBerry models, but it is a limitation nonetheless.
Although Verizon Wireless has been offering prepaid plans for quite some time, it is still a small part of the company's business. Moreover, when it comes to prepaid smartphone sales, the three largest players in the U.S. - Verizon, AT&T, and T-Mobile - have been losing ground to Sprint's Boost Mobile and Virgin Mobile, as well as Metro PCS, according to analysts.
For Q3 2012, prepaid smartphone sales for the smaller carriers climbed 23 percent compared to Q2 2012, while sales for the top-tier carriers declined 12 percent over the same period. The phenomenon has a simple explanation: smaller carriers wooed customers by offering a larger selection of prepaid phones for lower prices.
Both AT&T and Verizon brought cheaper prepaid offerings at the time and Verizon even expanded its prepaid smartphone line-up, but the smaller carriers seem to have been ahead of the game.
According to Verizon, customers do not necessarily have to purchase a new smartphone to take advantage of the new, cheaper prepaid plans.
"No-longer used smartphone sitting in a drawer at home can be activated on a prepaid plan with no annual contract," explained Verizon.
While top-range smartphones typically come with carrier subsidies and lengthy, costly contracts, consumers' interest towards prepaid plans has seen a constant growth over time. As the economy is still sluggish and uncertain for many, pay-as-you-go seems to gain ground as a safer alternative to expensive commitments.
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