Verizon CFO Fran Shammo: Tracfone is “our prepaid product”

Verizon, the nation’s largest mobile network operator, continues to bleed prepaid users and opts to cede the market to carrier-owned brands such as MetroPCS and Cricket. Meanwhile, the operator considers Tracfone its prepaid offering. 

In the first quarter of the year, Verizon lost 177,000 net retail prepaid users, which actually marked a slight improvement compared to the 188,000 it lost during the same period last year. While other operators like T-Mobile, Sprint etc. are still fighting over those users, Verizon CFO Fran Shammo said “those losses are an acceptable sacrifice as the operator focuses on more lucrative users.”

"Look, coming into 2015 and again in 2016 we said that the top priority would be to maintain the high quality of the base," Shammo said during a quarterly earnings call with analysts. "We now have 48 percent of our base on the new pricing (for unsubsidized handsets paid via installments) and we continue to push for that. Our retail prepaid is above market. We're really not competitive in that environment for a whole host of reasons and it's because we have to make sure that we don't migrate our high-quality postpaid base over to a prepaid product."

At this point, it will be difficult to say how effective Verizon’s strategy is. However, US Cricket and MetroPCS are clearly gaining traction as Verizon and Sprint back away from prepaid.

"If you look at the competitive nature, (other providers) are doing it with sub brands," Shammo continued. "They are not really doing it with their brands. And quite honestly, we use the TracFone brand as our prepaid product."

TracFone, of course, provides services on the networks of every major U.S. carrier.

Shammo went on to say that TracFone "has been extremely successful for us," although Verizon no longer discloses reseller sales data. But as analyst Bill Ho observed via Twitter, TracFone parent América Móvil lost 3.2 percent of its worldwide prepaid base in 2015. And TracFone, the largest U.S. MVNO, lost 58,000 net customers last year as users fled its voice-only plans.

Sprint’s Newly Launched “LTE Plus” Network Reaches 191 Markets including New York

Sprint, one of the largest US network carriers, declared the launch of its "LTE Plus" network across New York. The carrier is claiming that it has doubled the speed and capacity of more than 900 2.5 GHz cell sites in the market since the beginning of the year.      

    

Sources say that Sprint's LTE Plus combines transmissions in three bands of spectrum - 2.5 GHz, 1.9 GHz and 800 MHz and can deliver speeds in excess of 100 Mbps on supporting devices. In January, the network operator confirmed that the offering was available in 150 markets across the country, and it has since been extended to more than 190 regions.

           

"Our 2.5 GHz spectrum excels at moving high volumes of data at very fast speeds," Sprint CTO John Saw said in a prepared statement. "And our deep 2.5 GHz holdings give us more capacity than any other carrier in the U.S. This is a tremendous advantage, allowing us to keep adding the capacity and speed needed to serve New Yorkers' demands for data now and well into the future."

The declaration underscores Sprint's ongoing effort to maximize its spectrum holdings via LTE even as some rivals move ambitiously toward 5G. Jay Bluhm, Sprint's VP of network planning, said earlier this week “the carrier is taking a wait and see approach to 5G, noting that there's a lot in 4G and LTE Advanced still to be had to address ever-increasing data traffic on the carrier's network.” 

Sprint's network traffic has increased 85 percent year over year, Bluhm said at the Competitive Carriers Association's Mobile Carriers Show, and is on pace to triple by 2020. “The operator is leveraging LTE Advanced optimization technologies such as carrier aggregation and beamforming to meet that demand”, he said. As Sprint struggles to make ends meet through complex financial transactions, it will continue to leverage its high-frequency spectrum as fully as possible, CFO Tarek Robbiati said recently.

 "The most efficient spectrum for high-capacity networks is high-frequency spectrum, so the sort of spectrum we have, 2.5," Robbiati said last month. "And there's a simple engineering law that governs this. It's that higher frequency spectrum is more efficient to handle very large capacity of traffic, and that's a world we're moving toward with 5G."