Tuesday, September 13, 2011, 10:08 pm PT (01:08 am ET)
Verizon, AT&T introduce new prepaid plans ahead of iPhone refreshEven as rumors continue to swirl that Apple is preparing a cheaper, prepaid version of the iPhone, Verizon and AT&T on Tuesday announced new prepaid plans, just weeks ahead of Apple's expected 2011 iPhone introductions.
Verizon will begin offering on Thursday a $50 a month pre-paid plan for select phones, providing unlimited talk, text and data, according to the Wall Street Journal. Big-box retailers Best Buy, Wal-Mart and Target will partner up to sell the plan.
"This is a very competitive market, and we want to make sure we have a price portfolio to fit a greater number of customers," said Brenda Raney, a Verizon spokeswoman. "In these times, there are some people who would prefer living on a prepaid plan."
Verizon reported 4.4 million prepaid subscribers for the quarter ending in June, showing a 3.4% decline compared to the year ago period. On the other hand, postpaid subscribers amounted to 85.4 million, a 4.6% year to year increase.
The carriers main rivals in the prepaid business are Sprint, via Virgin Mobile and Boost, and MetroPCS. The former reported 13.8 million prepaid customers in June, with the latter amassing 9.1 million prepaid subscribers, a 23% and 19% increase for the period, respectively.
MetroPCS has similar unlimited prepaid plans available for as low as $40 per month, and Sprints Boost customers who pay on time can lower their bills to as little as $35 per month.
Verizon, however, will not lower unlimited plan prices below $50 as to prevent cannibalization of its postpaid subscribers, said James Ratcliffe, a Barclays Capital analyst.
Verizons initial unlimited prepaid lineup will include four handsets from LG, Samsung and Pantech for new customers, though some older prepaid phones can be used for the plan.
Meanwhile, unlimited postpaid plans have become scarce as carriers have struggled to keep up with heavy data usage by customers. Earlier this year Verizon announced the termination of unlimited data plans for postpaid consumers purchasing smartphones, including the iPhone. AT&T has also capped new iPhone and iPad data plans at 2GB per month.
But, Sprint is still offering unlimited data plans with its smartphones, with a recent report suggesting that the nations third largest carrier won't discontinue such plans in the event it launches the iPhone later this year, as has been rumored.
AT&T will begin offering a new GoPhone plan on Sept. 18, along with the option of an international long distance package for prepaid customers. The national plan will cost $25 monthly and include 240 nationwide voice minutes and unlimited, nationwide messaging, while the international feature will cost prepaid customers $10 and include 250 minutes to over 50 countries for 30 days.
The carrier also announced that prepaid customers can now roam in Canada for $.39 per voice minute, $.25 per message sent and $.20 per message received.
The iPhone 5 is expected to be launched in early to mid-October, with a growing number of reports suggesting that Sprint will join AT&T and Verizon in offering at least one iPhone model to American consumers. On Tuesday, however, a new rumor surfaced indicating that the mobile operator may only launch the iPhone 4 this October, as Sprint sales associates were reportedly being briefed only on the launch of the existing handset.
It has been widely suggested that Apple will launch two distinct iPhone models this year, an entry-level, dubbed the iPhone 4S, and a high-end iPhone 5. The former has been rumored to be a cheaper iPhone 4, one that could potentially be sold by carriers with prepaid contracts instead of regular two-year agreements.
Commenting on the prepaid market and the possibility of a cheaper iPhone option, Tim Cook explained in February that Apple doesnt want its products to be just for the rich, adding that the company is not ceding any market and is planning clever things to compete in the prepaid handset market.
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