If the news of Verizon Wireless’ new $50 prepaid plan left you wondering what the postpaid-centric operator was doing in the pay-as-you-go space, take a look at RadioShack.
The impetus for the plan came from Verizon’s new tie-up with RadioShack, company CFO Fran Shammo said yesterday during the Bank of America Merrill Lynch Media, Communications & Entertainment Conference.
“The reason we decided to go launch this now was really in conjunction with our partnership with RadioShack,” he said. “We felt it was extremely important that RadioShack have a prepaid product from Verizon because they’re heavily a prepaid distributor.”
Today marks the debut of Verizon Wireless products at RadioShack. The electronics retailer picked Verizon to replace T-Mobile USA devices, which were pulled from RadioShack shelves after the two companies were unable to resolve a breach of contract.
So if you’re thinking Verizon intends to take on the likes of MetroPCS any time soon, think again.
Calling postpaid customers “our bread and butter and that’s what we live to protect every day,” Shammo said the operator wouldn’t do anything to erode its lucrative postpaid base. Verizon conducted trials before launching the prepaid plans to ensure that fact.
“We trialed this in Florida and San Diego, and what we found from that trial was it elevated our prepaid market share – it did what we thought it would in the prepaid market, but also did not cannibalize our postpaid base,” he said.
Verizon’s prepaid plans are more expensive than those offered by other operators, and Shammo said that’s unlikely to change.
“It’s premium to the market, but again we’re a premium provider with a premium network, so we feel that we should get a premium price for the product,” he said.
RadioShack is highlighting the new plan in its launch of Verizon’s devices at its 4,400 company-owned retail stores in the United States. RadioShack is offering the plans with no-contract phones including the Samsung Intensity II, the Pantech Caper, LG Revere and Verizon Salute. Customers who purchase one of Verizon’s prepaid devices from RadioShack will get a $20 gift card to the retailer.
“The arrival of Verizon Wireless is a definitive enhancement of our multi-carrier retailing proposition,” RadioShack President and CEO Jim Gooch said in a statement.
RadioShack is also offering $100 off some Verizon Wireless smartphones, including the Motorola Droid Bionic, Samsung Droid Charge, LG Revolution and the HTC ThunderBolt. Cases and screen protectors for Verizon devices are being sold at a 25 percent discount. RadioShack did not say when the deals would end, but said they were a limited time offer.
