Verizon plans to offer an unlimited prepaid plan for $50 a month on September 15, as the carrier tries to appeal to an often ignored segment of wireless customers.
The Basking Ridge, N.J.-based company’s plan will give users unlimited calling, text messages and Internet data on select feature phones. Verizon is launching the plan nationwide after testing it in select markets and will make the offer available in all retail stores, as well as Best Buy, Wal-Mart and Target.
Verizon’s focus on a nationwide unlimited prepaid plan comes after the carrier faced criticism for overhauling its data packages. In July, the company scuttled its unlimited data plan and moved to a tiered system with more expensive options, which were poorly received by both critics and customers.
As the number-one carrier in the U.S., Verizon’s latest move shows how rapidly the prepaid market is growing. The carrier has been lukewarm toward the prepaid market since its inception, focusing instead on contract customers, but may be changing its attitude as the post-paid market slows down.
Verizon usually caters to customers with higher-income but likely wants part of the increasingly lucrative prepaid market, especially with the AT&T-T-Mobile merger threatening to bump the carrier into second place.
A move into prepaid may help Verizon diversify its wireless options, but the company’s new plan is still more expensive than offerings by its competitors.
Sprint has a large presence in the prepaid market and offers an unlimited plan through Boost Mobile for $35 a month. MetroPCS also offers an unlimited data prepaid plan, which is less expensive than Verizon’s at $40 a month.
Verizon is likely banking on the strength of its network to distinguish its prepaid option from the competition, but may be limited by its emphasis on feature phones. Virgin Mobile, Boost Mobile and Metro PCS all offer Android-powered smartphones with their prepaid options, but Verizon will only offer feature phones from Samsung, LG and Pantech.
Feature phones may be enough to satisfy customers’ talk and texting needs, but they offer a very limited Web browsing experience.
Verizon’s entrance into the prepaid market will likely yield the carrier some early success, but it may have to expand its options if it plans to compete in that market over the long haul.
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