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As users flee 3G, Verizon turns it into a prepaid network

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Willing to give up speedy LTE service to save a few bucks? Then Verizon(s vz)(s vod) has your number. The operator launched two new prepaid phone plans on Friday that include unlimited voice minutes and messaging.

For $60, you also get 500 MB of mobile data, while another $10 per month boosts your broadband bucket to 2 GB. There’s no contract involved, so the only “gotcha” is the limitation of service: These plans are only good for 3G phones, which have data connections 10 times slower than LTE devices.

We actually saw this coming a few months ago. Back in November, my colleague Kevin Fitchard noted that as Verizon customers migrate to the LTE network, the old 3G airwaves would be used less and less. Using the 3G network for any additional revenue generation is gravy at this point:

So in just year or two Verizon will have a largely empty 3G network. Eventually it will shutter those CDMA systems, replacing them with 4G technologies, but that could take the remainder of the decade if not longer. Verizon needs those CDMA networks for its legacy voice services, and its planned launch of an IP-based voice-over-LTE service is still on the drawing board. In short, that 3G data network is going nowhere so it behooves Verizon to find ways of filling it.

So who will these new plans appeal to? Folks that want Verizon’s coverage and call quality without a contract. They’ll have to use an older phone due to the 3G limitation but Verizon says the new prepaid plans support Android(s goog), iOS(s aapl) and BlackBerry(s rimm) devices. Yesterday’s flagship phone may be one person’s trash but with this plan, it could turn into someone else’s treasure.

12 Responses to “As users flee 3G, Verizon turns it into a prepaid network”

  1. Will be interesting to see if this (cheaper) excess capacity can 3G-enable cars and other “appliances.” (or science applications).

    Yes, true; TMO is better option. The EVDO coverage may be better in a few areas, but TMO 42mbps 3G coverage is way faster than Verizon’s pathetic 1mbps 3G data speeds. (If TMO gets the iPhone 5/5S in a few months, it’ll be a huge win and AT&T/VZW will feel churn.)

    Pre-paid is (theoretically) less expensive because of the $100-200 monthly mobile bill you’re forced to pay for 24 months (or the huge, non-linear ETF to get out of it) to get your subsidized iPhone or other smartphone…

  2. I just don’t understand the draw of no contract.It’s not like there’s so much movement in wireless pricing that it’s worth the hassle to switch every few months. And believe me, I’m what they call price-sensitive to the utmost degree.

    Maybe people like prepaid because it’s conceivable they might not be able to pay their bill one month, so the option of turning it off is appealing?

    I don’t get it.

  3. I use PagePlus (Verizon MVNO) just to get the best coverage network in the Northeast. I pay $55/mo for unlimted talk, text and 2GB of 3G data. Works great for me, and i rarely use 1/2 of the data allowance, usually about 1/4. If you are not a heavy data user, and you want reliability, then this is your best bet. Smartphones can be activated on the PagePlus network. I activated a Droid X2.

  4. Robert Wilke

    What was the line from PT Barnum,

    A sucker is born every minute.

    That’s what Verizon is hoping for. Sorry VZW I and many more are a heck of a lot smarter then this.

  5. what ever happened to pay per minute prepaid with an option to add data. all the major carriers used to have this but data was super expensive, now that data gets a bit cheaper everyone wants us to buy unlimited minutes/texts., but many people don’t need all the minutes.

    what i would really love to see is the old verizon prepaid plan with pay per minute and 99 cents per day unlimited data but with a LTE SIM card option.

  6. Verizon MVNOs Page Plus and TalkForGood offer even better prepaid rates for the same network. I wonder if Big Red somehow felt any competitive pressure from their own MVNOs?