Verizon’s More Everything plan is driving Edge adoption
In the prior parts of the series, we discussed the slower-than-expected increase in the adoption of Verizon’s (VZ) Edge program. We also discussed that the Edge program isn’t only beneficial to the customers, but is also beneficial to Verizon. We saw that Verizon’s lack of marketing efforts and increased competition from AT&T (T) and T-Mobile (TMUS) led to this slow Edge adoption growth. Nonetheless, the Edge adoption increased from 13% in the first quarter of 2014 (or 1Q14) to 18% in 2Q14. The company’s More Everything plan drove this growth.
More Everything plan
More Everything is a plan where you get unlimited calling minutes, unlimited local and international messaging, shareable data for up to ten devices per account, mobile hot spots, and 25 gigabytes of Verizon cloud storage. On top of that, you get a $10 discount if you are an existing Edge customer and your data allowance per month is up to eight gigabytes. The discount becomes $25 for an existing Edge customer if your data allowance is above ten gigabytes.
This strategy is helping Verizon to increase the popularity of both the Edge and More Everything programs. As the chart below shows, More Everything penetration of all postpaid accounts has increased from 36% in 2Q13 to 55% in 2Q14.
Discounts helping to increase the popularity of ten-gigabyte plans
As discussed above, you get a $25 discount if you are an existing Edge customer and your data allowance is ten gigabytes or more. During the conference call to announce earnings, Verizon’s management mentioned that it’s seen an increase in customer uptake of ten-gigabyte plans over the last three quarters. The $25 discount is definitely helping to push this uptake.
The continued adoption of Edge and More Everything plans would benefit exchange-traded funds (or ETFs) such as the Technology Select Sector SPDR Fund (XLK) and the iShares Dow Jones U.S. Telecommunications ETF (IYZ), which have high exposure to Verizon.