Over the past few months things have heated up quite a bit in the U.S. cellular market. T-Mobile challenged convention with its “uncarrier” moves forcing rivals to adapt accordingly. While there hasn’t been a full blown price war just yet some of these carriers have made pricing changes to stay in the game. Verizon says that while it will continue to respond to these changes it won’t “overreact to a competitor.”
Verizon CFO Fran Shammo, speaking at the Jefferies Technology, Media and Telecom Conference, said that the carrier will react rationally and where it thinks it needs to react. “The key to any competitive move is not to overreact to a competitor,” he said.
Some might beg to differ seeing as how the carrier posted a 20.4 percent year over year decline in postpaid additions. It lost 95,000 postpaid customers this quarter while T-Mobile brought in more than 1.3 million partly because it offers to pay off Early Termination Fees of customers willing to dump their existing carrier.
The carrier did respond earlier this year with the launch of a $60 entry level plan which has now been discounted to $55 per month. Verizon launched the plan after it felt pressure on its feature phone customers and 3G subscribers. And even though it lost a lot of postpaid smartphone customers in the previous quarter it did add 634,000 postpaid tablets which contributed a sizable chunk to its revenue.
In the coming months Verizon expects to bring in more customers through its Edge early upgrade program. Shammo expects that by the end of the second quarter 30 percent of Verizon’s subscribers will sign on to the program.
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