Verizon this week rolled out a new feature that allows prepaid customers to stay connected but slows their data speeds once they surpass their monthly allowance.
Dubbed “Always-On Data,” the new program throttles data speeds to 128 kb/second for the rest of the billing cycle once a user has reached their data limit. The program is offered as part of the carrier’s $60 per month and $45 per month prepaid plans at no extra charge.
While there doesn’t appear to be any limited to the amount of throttled data a customer can use, a Verizon spokeswoman said Always-On shouldn’t be considered an unlimited plan because customers will lose service at the end of the pay cycle if they don’t refill their prepaid account.
The feature is similar to Verizon’s recently unveiled “Safety Mode” for postpaid users. Like Always-On, Safety Mode offers postpaid users unlimited throttled data once they reach their 4G LTE data cap. The feature, which Verizon billed as the end of overages, is available for free on the carrier’s XL and XXL data plans or for $5 per month on the S, M or L plans.
According to Verizon, its renovated plans with Safety Mode were an immediate hit with customers.
The move comes amid Verizon’s slow pivot to keep up with offers from disruptive competitors T-Mobile, Sprint and AT&T, which all offer unlimited data options for some or all customers.
Verizon executives, including CFO Fran Shammo, have previously been adamant the carrier has no plans to revive a true unlimited option, but Safety Mode and Always-On suggest Verizon is getting the (very belated) hint from both its customers and competitors.
The change may also represent a change in stance from the carrier on its prepaid offerings.
During Verizon’s first quarter earnings call in April, Shammo said the carrier knew its prepaid offerings are “above market” and is “really not competitive in that environment.” Shammo said Verizon wasn’t planning to use its own prepaid brand as a competitive force, but would instead use its TracFone brand to target the prepaid market.
A month later, however, Verizon announced it was permanently adding an extra gigabyte of data for Auto Pay customers and opened international calling for customers on its prepaid plans.
Though Verizon’s prepaid offerings still appear to lag behind the competition, the addition of Always-On and international calling make them significantly more appealing – which is something that could bode well for the carrier.
In the first quarter 2016, Verizon lost 177,000 prepaid users as well as 8,000 postpaid phone users.
Filed Under: Carriers
