Customers of other mobile carriers are being offered incentives of up to $650 each to switch to Verizon, but not everyone will be entitled to the full value of the company's latest promotion. Unveiled yesterday, the offer promises each user a prepaid card to cover the purchase of a 4G LTE smartphone from Verizon.
The offer requires that users port existing cellphone numbers to Verizon and trade in their old devices while buying new smartphones on installment plans. In return, they'll each receive a prepaid card with a maximum value of $650, minus the trade-in value of their old devices. Without a trade-in, the prepaid card offer has a maximum value of $350.
In addition, new Verizon customers who choose XL or XXL plans will each receive an additional 2 GB of data "every month for life for as long as your device is active on the plan," the company said. According to Fortune magazine, the offer is the first from Verizon "in recent memory" to promise to cover the costs of early termination fees for customers switching from competing carriers.
Incentive Wars, Growth in Installment Plans
Verizon's latest incentive offers a counterpoint to the ongoing and aggressive promotions led by competing companies like AT&T, Sprint and T-Mobile. Those promotions, too, promise credits and other financial incentives to help customers defray the costs of terminating their service plans early.
Currently ranked as the largest of the wireless carriers in the U.S., Verizon reported just over 110 million retail wireless connections in its financial earnings report for the third quarter of this year. The company added 1.3 million new net postpaid wireless customers during the quarter.
Among new and existing customers, Verizon sees ample opportunity to upgrade devices from basic and 3G phones to more advanced 4G smartphones. It also said it expected the percentage of customers with phone installment plans to increase from 58 percent in the third quarter to around 70 percent in the fourth quarter of this year.
LTE Expansion Benefiting Consumers
In announcing its new promotion, Verizon pointed to market research data that found former customers who switched to T-Mobile and Sprint and then returned to Verizon within six months often cited "network quality and performance" as the reason for doing so. The company also cited recent reports from the mobile network research firm RootMetrics that ranked Verizon as the top U.S. wireless provider in terms of overall performance.
However, RootMetrics' assessment of mobile network providers for the first half of 2015 noted that the performance differences between Verizon and its competitors have been narrowing recently, with both AT&T and Sprint posing the greatest potential challenges to Verizon's lead.
"The carriers' LTE rollouts are expanding and consumers are benefiting from faster speeds, better reliability, and a tighter race between the networks," according to a RootMetrics' report. "The introduction and expansion of LTE service has altered not just what we do with our phones but also our expectations for consistent speed and reliability."
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