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Verizon undercuts its own lowest price with 2GB postpaid plan for $40 a month

Why it matters to you

Verizon's new prepaid plan is music to the ears of frugal customers. It includes 2GB of data for $40 a month.

Verizon, apparently not content with introducing one disruptive data plan, introduced another this week. On Monday, the U.S.’s largest carrier announced a new postpaid option that starts at $40 a month — a full $10 cheaper than the lowest-priced plan it previously sold.

The plan is relatively no-frills, as you might expect. Customers, who pay upfront, get unlimited texting, calling, and 2GB of data per month, down slightly from the 5GB offered on its $50 prepaid plan.

That’s significantly less expensive than Verizon’s postpaid subscription plans. The cheapest, which starts at $55, includes 2GB of data per month. And it comes with benefits like Always-On Data, which allows you to download files at a reduced rate of 128kbps after you’ve exceeded your data cap, and CarryOver data, which lets customers roll over unused data for one month.

But it’s more expensive that comparable plans from its biggest competitors. Sprint’s Boost Mobile prepaid brand offers a 2GB plan for $30 a month, while AT&T’s Cricket Wireless and T-Mobile’s MetroPCS sell 1 GB tiers for $30. T-Mobile offers $40 a month for 3GB and an unadvertised $50 a month for 5GB. And AT&T offers a $40 for 4GB.

The new plan come of the heels of Verizon’s new unlimited data plan, which starts at $70 a month and includes unlimited texts, calls, plus 10GB of mobile hot spot data. It kick-started something of a trend: Last week, Sprint and T-Mobile dropped restrictions on their data plans and AT&T reintroduced unlimited data for customers who haven’t purchased a DirecTV or U-Verse package.

It’s a postpaid dichotomy, Fortune notes. Increasingly, carriers are splitting offerings into two distinct camps: Data-plus family and individual plans on the high end, and constricted data plans on the low end. T-Mobile, for example, recently eliminated its least expensive regular monthly plans, leaving customers with the stark choice of opting for unlimited plan starting at $70 a month or switching to MetroPCS.

There’s logic behind the industry’s effort — family plans and heavy data plan users are likely to spend more for a larger buckets of data. But competition’s helped to drive down prices. AT&T and Verizon reduced the price of high-data plans to bring them in line with Sprint and T-Mobile’s low-cost unlimited tiers. And now, every major carrier offers an unlimited data plan for $100 or less a month.

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