As wireless services, especially high-speed data service, increasingly become a commodity with the corresponding race to the bottom in terms of price, Verizon has largely avoided being sucked into the price wars. Despite the goading of T-Mobile’s John Legere and Sprint’s pricing moves, Verizon has resisted making wholesale changes to the way it does business. According to the latest financial report for Verizon, shared by Verizon CFO Francis Shammo today, the company lost 138,000 postpaid customers in the last quarter and they seem to be okay with that.
Shammo says Verizon is focused more on customers who value factors like the quality of the network over price,
“If the customer who is just price-sensitive and does not care about the quality of the network—or is sufficient with just paying a lower price—that’s probably the customer we’re not going to be able to keep.”
Positioning a company to be a supplier of a premium product while others target less expensive buyers is a strategic move that can pay off. One only has to look at a company like Apple which seems content to be a niche player while reaping a financial windfall. Verizon is unique in that regard as they are currently the largest wireless carrier in the U.S. and their ability to expand and improve their network is supported by the vast customer base they have.
Sources have noted that Verizon will have to do some work to ensure consumer’s consider them a premium brand worth the extra cost. One part of this strategy involves deployment of a new wireless video service the carrier hopes to roll out this summer. Verizon is currently working on securing content from a variety of sources. The big question that remains though is how plans will be structured. T-Mobile’s Legere has criticized carriers for penalizing customers who take advantage of services made available and has specifically called out Verizon for asking customers to access NFL content then turning around and charging overage fees when customers do that.
source: Bloomberg
Come comment on this article: Verizon to position itself as high quality service at expense of bargain shoppers
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