Verizon's new prepaid team gets to work

Verizon on Wednesday announced an update to its Visible prepaid offering, bulking up the brand's premium plan with more goodies and extras, including additional hotspot data, smartwatch support and international roaming options.

"Our upgrades to the Visible+ plan – including a wireless plan that travels with you, wearable connectivity to fit your needs, and increased speeds – are a testament to delivering exceptional and transparent service, as we aim to make Visible the most accessible, responsive, and innovative wireless carrier, all while maintaining affordability," explained Jeremy Bolton, Visible's managing director, in a release.

The move comes just a few weeks after Verizon's new prepaid chief, Nancy Clark, laid out her plan to get the business back to growth.

"We have strong momentum, clear objectives, and our sights set firmly on our goal to win and succeed," Clark wrote on social media recently, announcing her new leadership team for Verizon Value, the division that oversees Verizon's various prepaid brands, from TracFone to Visible.

Clark's efforts are important because, as noted by FierceWireless, T-Mobile recently passed Verizon as the nation's biggest prepaid wireless provider with roughly 21.6 million customers. That development stands as an indictment of Verizon's struggles in the prepaid sector: The company has been steadily losing prepaid customers since it closed its $7 billion purchase of prepaid giant TracFone in 2021.

"We've got a lot of work going on in that space," acknowledged Sowmyanarayan Sampath, the head of Verizon's consumer business, during a recent investor event, according to Seeking Alpha. "I have a couple more quarters of hard work there to get back."

The art of prepaying

Unlike AT&T with its prepaid Cricket business, or T-Mobile with its prepaid Metro business, Verizon historically has avoided the pay-in-advance portion of the wireless industry. Instead, the company preferred to chase postpaid customers, those who pay their bills after using services. After all, such customers generally generate far more revenues and profits.

But that changed during the early days of the COVID-19 pandemic, when Verizon's CEO Hans Vestberg agreed to acquire America Movil's massive prepaid operation. TracFone's 21 million prepaid customers immediately propelled Verizon from last place to first place in the US prepaid marketplace. At the time, the move looked wise in light of worries that the pandemic would dim the world's economy and drive mobile customers to cheaper prepaid plans.

But that didn't really happen. Instead, prepaid customers across the industry continue to shift to postpaid plans in the US. Meanwhile, Verizon struggled to regain momentum in the wireless market via a series of management shake ups.

The last of those, roughly a year ago, put Sampath in charge of Verizon's consumer business, which had been shedding postpaid customers to competitors.

Since then Sampath appears to have righted the ship, reversing Verizon's postpaid customer losses. Now he's turning his attention to the prepaid side of Verizon's business.

"The thing you'll see in the prepaid business is Sampath and the team spent a lot of time and a lot of rigor rightsizing the postpaid business, and you'll see that same rigor as we focus now on the prepaid business and setting ourselves up for improvements later this year and into next year," Verizon CFO Tony Skiadas said at a recent investor event, according to Seeking Alpha.

Assembling the team

Angie Klein had been in charge of Verizon's Value business since the company closed its purchase of TracFone. Verizon Value stretches across 11 prepaid brands including Straight Talk, Total by Verizon, Tracfone and more. "I am immensely proud of the work we've done and the team we've built bringing three operating entities together as one, scaling our growth brands, improving margin, and setting the foundation for the future. I am handing over the reins to an amazing leader, Nancy Clark, who will accelerate our mission of building a better connected world," Klein wrote on social media earlier this year.

In her own recent post, Clark named her Verizon Value leadership team, including Chief Revenue Officer David Kim, SVP of Customer Operations and Experience Ken Lain, CMO Cheryl Gresham and Head of Base Management Mike Sarcone.

Some, like Sarcone, are longtime Verizon executives. But others hail from some noteworthy positions. Gresham previously worked at YouTube and TikTok before joining Visible in 2021, while Kim was previously the general manager for T-Mobile's fixed wireless business.

Clark boasted of her "rock star leadership team" for the 21 million customers under her purview.

What to expect

"Our prepaid results remain challenged in the fourth quarter," acknowledged Skiadas, Verizon's CFO, during the operator's most recent quarterly earnings call. The business shed another 289,000 customers in the fourth quarter.

But Skiadas promised improvements throughout 2024.

"We saw continued strong growth within the Visible and Total by Verizon brands, which we will continue to scale," he said. "The team is also focused on our partnerships to improve the performance of the Straight Talk brand. We believe we're taking the right steps to better position our offerings in the market and expect to see some stabilization in 2024."

However, Clark and Verizon are facing another major challenge in the coming months. The FCC's Affordable Connectivity Program (ACP) may run out of funding by May. The program basically gives up to $30 per month to low-income households for telecom services.

Roughly 1.2 million Verizon prepaid customers subscribe to the program.