Verizon to 'broaden out' prepaid offerings

A top Verizon executive said the operator still expects to close its purchase of TracFone this year. Further, he said the operator plans to flesh out its prepaid business in a way that would stem the tide of customers opting to move from prepaid services to postpaid services.

"I think we're actually well positioned to change that value segment," Verizon's Ronan Dunne said during an investor event Monday morning. Dunne said the operator "hopes to broaden out the product offering" in prepaid if it is able to successfully acquire TracFone.

Verizon announced its $7 billion intention to purchase America Movil's TracFone almost exactly a year ago. Since then, the transaction has been clouded by increased regulatory scrutiny. However, Dunne said Verizon continues to expect to close its purchase of the company by the end of this year – particularly in light of new support for the transaction among some public-interest groups and unions.

"We're very confident" in closing the acquisition, Dunne said.

And though Dunne didn't say exactly what Verizon might do in the prepaid market following its acquisition of TracFone, he suggested the company would expand its prepaid offerings in a way that would slow the migration of customers from prepaid services to postpaid services.

Dunne's comments are noteworthy considering US mobile providers in general are signing up far more customers during 2021 than financial analysts had expected. Specifically, the analysts at LightShed Partners recently said that US wireless carriers collectively stand to gain a total of 9 million new postpaid subscribers this year, up from a norm of 6 million. One of the reasons for that growth is the number of prepaid customers switching to postpaid plans. Dunne suggested Verizon might stem that trend by offering better prepaid plans. He also said Verizon might offer fixed wireless Internet services to its prepaid customers.

Verizon isn't the only operator putting a renewed focus on the prepaid sector. For example , T-Mobile recently announced a free 5G phone coupled with half-priced unlimited prepaid 5G service. The carrier also this week said it would expand the sale of both its prepaid and postpaid services through Walmart.

T-Mobile has been boasting that it has a leg up on its competition because of its growing 2.5GHz midband 5G network. Verizon and AT&T plan to counter T-Mobile with speedy midband 5G networks of their own when they launch services on their C-band spectrum later this year. When questioned about whether T-Mobile has a lead in the rollout of midband 5G, Verizon's Dunne said "I don't think we're at any competitive disadvantage at all."

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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