Pages

Tuesday, 19 July 2016

Sprint and T-Mobile Swoop Down on Price Hike by Verizon


Verizon ups the charges for its monthly plans as well as the amount of data offered in these plans, to which the competitors, namely T-Mobile and Sprint were quick to react.

The United States' largest carrier hikes its monthly service by $5 to $10 monthly along with adding supplementary data in each of these plans. Some additional features were also introduced such as "Safety Mode" feature that lets users stay connected even if they reach their monthly allocations, while decreasing speed to 128 Kbps and enabling users to keep unused data from the last month.

But several offers were already sailed out by its competitors, to which the competitors pounced upon quickly. John Legere, CEO of T-Mobile tweeted that his company has introduced a data rollover feature through its Data Stash offering long before.

He tweeted "If you're going to copy #DataStash, why copy @att's sad version of it?" "A copy of a copy = a terrible @verizon version of @TMobile #DataStash."

Marcelo Claure, Sprint CEO also mentioned "GREAT strategy @Verizon," "Step 1: Raise prices. Step 2: Tell them you aren't raising prices. Step 3: Tell them to be thankful. #SwitchtoSprint."

While this seems to be a price hike, some analysts noted that the company actually dropped the prices in terms of cost per gigabyte of data. And the move is looked at as an effort to better monetize its users. For instance, "Safety Mode" charges $5 per month for customers who are not currently on the company’s two costliest data plans. 


As per a research note written by Wells Fargo Securities analysts "While Verizon continues to lead the industry in network performance (as shown from numerous third-party studies), in some ways a case could be made with these new plans and offerings Verizon is acting more 'me too' to meet some of the perks which Verizon's competitors are already offering." "While an increase in the monthly recurring charge is a positive for ARPU – with things like Data Rollover and Safety Mode offered – there are more opportunities for customers to be smarter with their data usage and limit the upsell capability of this ARPU."

No comments:

Post a Comment