Posted by: Olga Kharif on March 6, 2008
I just got a mailing from Verizon Wireless, urging me to buy the company’s new plan, which offers unlimited calling for $100 a month. The way the mailer is worded, it’s obviously geared toward younger demographics: “Plan on dishing more dirt, shooting more breeze, returning Gramma’s calls,” the mailer says.
Chances are, this mailing has caught many analysts by surprise. They’ve speculated that Verizon, Sprint Nextel, AT&T and T-Mobile — all of which recently began offering $100 unlimited plans — won’t be pushing them too hard, as these plans could encourage the carriers’ existing high-end subscribers to move to a cheaper plan. T-Mobile USA clearly has this mindset: You have to look hard to find the plan on the carrier site.
But Verizon’s strategy is different. The company is, apparently, trying to get many of its younger subscribers to pay more. Today, an average wireless user pays only $50 a month — half of what Verizon is charging for the plan. If Verizon manages to persuade many of these lower-paying users to switch over to a more expensive plan, the company could make up for any revenue losses and then some.