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February 05, 2015

Verizon Takes Measures to Stem Tide of Customer Defections

Verizon's fourth quarter results, according to reports, showed a trend in the making that's gravely distressing under the best of circumstances: large numbers of customers leaving Verizon for other service providers. That's the kind of thing that can make the biggest mobile provider not so after a certain while, so Verizon—showing some sound corporate savvy—is taking steps to stop the outflow of customers currently experienced. As such, Verizon's got some clear plans in mind, and hopes a few new incentives will keep customers in the game.

The first such measure is a slight increase in its data plan. Those with ‘More Everything’ plans will be the ones to see this, raising the data cap, at last report from one gigabyte to two and from three to four. The extra gigabyte reportedly represents, effectively, a $10 discount on some plans. Plus, those who have ‘More Everything’ plans in the six gigabyte range or higher will be able to add smartphones on the Verizon Edge plan, which in turn allows same to pay a discounted network-access fee. This was previously only available to those who were working with a 10 gigabyte plan or higher. The offers in question are now effective, and available regardless of whether the interested user is a new or existing customer, a development that should be welcome for existing customers tired of seeing the good deals go to new customers alone.

Reports suggest that Verizon has no plans to chase what are called “certain lower-end customers,” but the expanded discounts and the like should go quite some way in terms of keeping customers on hand. There's no doubt that customers are more concerned about data plans than ever before, particularly as so many new uses for data emerge. Between video and gaming, as well as a growing variety of mobile workforce applications, users need more data than ever, and most users aren't getting it from AT&T and Verizon. Meanwhile, the expansion to Verizon Edge will likely go quite some way in terms of getting users on board, as customers can pay a monthly fee over the course of 24 months to cover the cost of smartphones, instead of paying for the phone outright. This also allows a discount on device-access fees, and that's been expanded as well.

Naturally, there will be differing opinions on whether Verizon's latest move is just what's needed to get users coming back and sticking around, or whether this is a move too little, too late. It's clear Verizon's giving this the old college try, so to speak, but it will likely be a question of just how much perceived value there is here. While the Verizon Edge plan might go some way toward bringing in some of that “low-end customer” described earlier—being able to spread a bill over 24 months might be regarded as helpful—the extra data really isn't all that much extra. On a percentage basis, it's quite a gain, but we're still ultimately talking about a data cap that wouldn't allow a user to fill up a USB thumb drive selling for just $7 at Best Buy in a month's time.

It will be interesting, though, to see if these new measures help keep users in the fold, or even bring back some of the lost. Though it will take time to see just how that works out, it's clear that something needs to be done to keep users interested in an increasingly competitive mobile communications market.

Edited by Maurice Nagle

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