Verizon Wireless: Calling in a new flat-rate plan
Posted by: in Marketing and AdvertisingFiled under: Products and services, Consumer experience, Marketing and advertising, Verizon Communications (VZ)
For some mobile subscribers, it can be scary to look at a monthly bill. But things are changing and now Verizon Wireless (NYSE: VZ) has launched a new flat-fee plan for unlimited domestic calls. The fees range from $99.99 to $139.99 per month.
True, this may pinch revenues in terms of forgoing lucrative overage charges. But then again, Verizon must deal with the competitive environment.
To get a perspective on things, I interviewed Allan Keiter, who operates MyRatePlan. According to him:
“It was inevitable that this would eventually happen, as per minute costs in rate plans have continued to drop and regional carriers like MetroPCS and Cricket have had some success with an unlimited product.
“Usually what happens in wireless is that by the time new products are announced, the customer benefit isn’t as great as it might first seem. For example, a Verizon customer can this day get 2,000 minutes for that same $99.99. While unlimited is obviously greater than 2,000, that current plan includes unlimited nights and weekends, as well as free calling to other Verizon customers (some 60 million or more). So, at the end of the day, for existing Verizon customers, this plan only benefits those who use more than 2,000 minutes during peak time (6 am to 9 pm weekdays) and calling people who aren’t other Verizon Wireless customers. My guess is that’s not a huge share of their customer base, although it could offer savings to those who would trade down from the $149.99 or $199.99 plans.
“The real benefit for Verizon is on the marketing side. They are the first massive carrier to roll this out nationally, so could be quite attractive to heavy users currently with other carriers. This could also be of interest to people whose usage is heavy and bounces around a lot. People like knowing what their bills will be, and this eliminates the overage risk for voice calling.”
Tom Taulli is the author of various books, including The Complete M&A Handbook
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