Carriers focus on pre-paid wireless, budget-conscious bundles

Carriers in both the fixed-line and wireless space have shifted their focus to the lower end of the consumer spectrum as the lower end continues to grow in response to a struggling economy. All of the major carriers this month have announced some form of initiative to save customers money. Whether in the form of cheaper bundles or pre-paid wireless options, the operators are focused on capitalizing on any revenue-generating opportunity the economic recession might present.

Verizon last week introduced its cheapest bundle of phone, Internet and video services yet. With access-line penetration down 12% from last year’s third quarter, the carrier is looking to both reinvigorate its landline business and attract customers who are cutting back on spending. In announcing the bundles, which start at $79.99 for a triple-play package, Verizon stressed simplicity, the household budget and value as its main selling points. The new double or triple-play bundles can save consumers between $15 and $35 per month, according to Verizon, and the price will no longer vary by state.

Along the lines of simplicity, Verizon added a 1-megabit-per-second triple-play bundle to the mix, which also features Verizon’s Freedom Value unlimited local and long-distance calling without any additional calling features. While this Freedom Value plan isn’t new to Verizon, it is to the bundle, a Verizon spokesman said. Outside of the cost savings, Verizon also stressed that broadband can make it easier for consumers to work and shop online, thus also saving money by not leaving the house.

“That is what this about – better value, reminding people if they go for the broadband experience, we have a great opportunity for them,” the spokesman said. “And once they go there, they are going to find in this economy it’s a great tool to have for lots of reasons. At this pricing, we think it’s very affordable as well even in a tough economy.”

On the wireless front, prepaid service plans have seen an uptick in interest from consumers on T-Mobile’s network. T-Mobile, which announced its third-quarter earnings last week, added mostly prepaid subscribers. Out of 670,000 new customers in the third quarter, 44% were on multi-year contracts, down from 80% the previous quarter. Prepaid plans might not be the big money-maker – telecom analyst Jeff Kagan estimates they bring in $24 to $26 per month compared to contract customers who spend $50 to $52 per month – but they are becoming a more viable option in a challenged economy.