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Verizon Makes more Money per Customer than any other Carrier

July 22, 2014 - Written By Abhinav Singh

 

A report from Customer Intelligence Report Partner (CRIP) says that Verizon is making an average of more than $100 per account (ARPA, Average Revenue per Account) which means that they are making more money than any other carrier in U.S. The report also says that 14 percent of Verizon customers pay more than 200$/month on an average (which is the highest in the industry) followed by AT&T, where 5 percent of customers pay more than $200. T-Mobile and Sprint do not have any customer paying such a hefty amount per month.

Verizon stopped their unlimited plans in 2012, which means that now with limited plans the customers are paying for every bit of data being used by them instead of paying a flat fee. On this John Lowitz, CIRP partner said, “Verizon has succeeded in getting the most out of its smartphone customers. Not only do more of their customers use Verizon data on additional devices, with limited data plans, their customers also pay for their actual data usage.” T-Mobile and Sprint have higher percentage of customers over their unlimited data plans (nearly 78% for both) as they are the only carriers (in Tier-1) offering this type of plan. T-Mobile and Sprint are smaller players in this industry as compared to Verizon and AT&T, so as of now this unlimited data plan is working in their favor to attract a good chunk of customers. T-Mobile is mainly focusing towards increasing their customer base and as of now it is the cheapest among these Tier 1 carriers. It is evident from the CIRP report which says that 25 percent of their customers tend to pay between $25 and $50 per month, 43 percent pay between $51 and $100 per month and 27 percent pay more than $100 per month.

Verizon and AT&T still have nearly 22 percent and 44 percent on their grandfathered unlimited data plans and this number is consistently reducing. Verizon introduced More Everything few months back and it has been reported that more than 50 percent of postpaid customers are available on that plan which is considered to be the main reason of hike in their ARPA figures (by 6.3 percent) when compared with the last year. Along with Verizon, Sprint is the only one who reported a gain on postpaid ARPU on year -over-year basis. However, it is expected that the carriers will be in tough competition to retain and add new postpaid customers to their list. This year, T-Mobile will lead the figures in the customers whereas Verizon and AT&T will fight for the second position.