Following the recent news that Verizon has launched Yahoo Mobile, a new prepaid wireless brand that offers unlimited talk, text and data for $39.99 per month to consumers in the US, Tammy Parker, Senior Technology Analyst at GlobalData, a leading data and analytics company, offers her view:

“Verizon aims to reinvigorate its Yahoo brand and jump-start its standing in prepaid wireless services via this new mobile offering, which leverages the platform and ecosystem it has already built around Visible – the digital-focused brand that Verizon launched in mid-2018. Though Yahoo is a quarter-century old, and has had its share of struggles, the brand nonetheless retains US, and even international, mass market brand recognition. This gives Yahoo Mobile an advantage out of the starting gate, whereas Visible has had to focus on building name recognition.

“There is every reason for Verizon to maintain and develop both wireless brands. Verizon has long struggled in prepaid because it did not have a secondary prepaid brand that could compete directly against AT&T’s Cricket Wireless, Sprint’s Boost Mobile and Metro by T-Mobile without cannibalizing Verizon’s lucrative postpaid customer base. Now Verizon has two prepaid brands that can target a spectrum of demographics but appeal largely to digital natives. As these are digital app-based operations, the brands’ costs for customer acquisition and retention are quite modest compared to those of more traditional wireless service providers.

“Furthermore, Yahoo Mobile was created to play a significant role in bolstering the overall Yahoo universe, as evidenced by the fact that customers are required to have a Yahoo account to subscribe to the mobile service. Customers will also get Yahoo-based perks, such as free Yahoo Mail Pro for ad-free email across all their devices, which will help differentiate Yahoo Mobile in the marketplace.

“Though the Yahoo benefits are not available to Visible customers, the two brands have a lot of other features in common. As they are low-cost, digital brands, neither operates any physical stores, and both brands run on Verizon’s 4G LTE network. Promoting common features under two distinct brands is a cost-effective approach for Verizon in its effort to secure more market share in the US prepaid wireless space.”