Verizon’s Ploy to Transform Prepaid Customers into Postpaid Contracts

by Matt Klassen on May 18, 2016

verizon-horns1In an effort to keep pace with rival and current wireless market disruptor T-Mobile, Verizon has finally turned its attention the prepaid market, something Big Red has traditionally left to the lesser lights of the wireless industry.

To that end, Verizon announced that effective this past weekend, the data allotments at all prepaid price points would be increased, meaning that at $45 customers will get 3GB of data, up from the previous 1GB, while the $60 plan doubles that data to 6GB. In fact, on the face of it seems like Verizon is finally embracing the un-carrier philosophy, doing things that solve the extant issues of the wireless industry while offering added value for consumers. But in true Verizon fashion, even when it says it’s helping customers, it’s really still screwing them over.

For you see, the one caveat to Verizon’s bold plan to radically increase the data allotments for prepaid service is that customers will need to sign on to the company’s Auto Pay system, a direct payment system that allows for Verizon’s bill to be paid automatically, effectively securing revenues from prepaid customers by ostensibly turning them into guaranteed postpaid contracts. Maybe Verizon is unclear about what being an un-carrier actually means…

“Whether you’re just starting out with your own wireless plan or simply love to have complete control of your wireless spending, prepaid plans give you the best network on the latest phones. Prepaid plans from Verizon keep you in control without the worry of overages or hidden fees,” Rob Miller, Verizon vice president of consumer pricing, says.

That officially stands as the nicest thing Verizon has ever said about the prepaid market, for as I mentioned, before T-Mobile showed just how lucrative the prepaid market could be, Verizon wanted absolutely nothing to do with it, giving that segment access to second rate phones with second rate service. For Verizon it’s always been about secure postpaid revenues, so perhaps it comes as no surprise that as Big Red finally turns its attention to this growing prepaid sector, its only goal is to turn it into something else.

Now granted opting for prepaid service still has its perks, as even those who refuse to sign up for the company’s Auto Pay system will still receive a modest bump to their data allotments, not to mention the fact that prepaid customers are not locked into binding service contracts, they’re simply billed like they are.

But even with that in mind, Verizon seems to have got the prepaid market all wrong. In contrast to Verizon’s data bump,  Sprint unveiled its Better Choice XXL plan this past weekend as well, a $100/month plan that comes with a relatively massive bucket of data (40 GB) that can be shared across multiple same-family users and now comes with a free year subscription to Amazon Prime (a $99 value). By comparison Verizon’s plan now seems hardly worth talking about.

Of course what is worth talking about is again just how wrong Verizon has got this whole un-carrier revolution, as the only thing Big Red has shown interest in is turning this new way of doing things into the old way of doing things. As one tech blogger writes, “As T-Mobile continues to shake, rattle and roll, the other carriers are forced to play the game, even though they may not understand the rules! The Uncarrier is much more than more data in the data cap.”

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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