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Wal-Mart Signs Agreement with Verizon Wireless

Wal-Mart Signs Agreement with Verizon Wireless
By LongDistanceUS.com on Monday, June 19 2006

Wal-Mart Stores Inc. continues to make strides on the mobile retail front, expanding its agreement with Verizon Wireless to include postpaid plans and high-end multimedia phones.

The chain, which not long ago stocked only prepaid offerings, will offer two Vcast music phones as well as the multimedia Motorola Inc. Razr V3m at its 1,950 stores nationwide. The agreement, which is scheduled to be unveiled this week, builds on a partnership that saw Wal-Mart take on Verizon Wireless' prepaid INpulse offering earlier this year.

The move marks an important step for Verizon Wireless, which continues to look for retail alternatives in the wake of the decision to part ways with RadioShack Corp. earlier this year. RadioShack instead teamed with the industry's largest player Cingular Wireless L.L.C. to go along with its other wireless retail partners Sprint Nextel Corp. and prepaid provider TracFone Wireless Inc.

Perhaps more importantly, though, the closer relationship with Verizon Wireless underscores Wal-Mart's progress in selling mobile phones. The mega-retailer has seen its wireless retail share increase by nearly 4 percentage points, according to a report released last week by NPD Group, and has actually overtaken T-Mobile USA Inc.'s company-owned stores to rank as the fourth most popular place to buy mobile phones. Stores owned by the three largest Tier 1 carriers lead the list of retailers.

In addition to Verizon Wireless prepaid services, Wal-Mart sells no-contract offerings from Cingular, TracFone, Virgin Mobile USA L.L.C., Movida Communications Inc., Alltel Corp. and T-Mobile USA.

The traction stems from Wal-Mart's efforts to educate its personnel on wireless phones and to give prime placement to consumer electronics offerings, NPD found. The company's notoriously thin profit margins are beginning to attract consumers from other retailers, as well, and Wal-Mart continues to benefit as wireless continues to reach older and less affluent demographics.

"Many consumers still do not associate Wal-Mart with selling brand-name wireless services and devices," said Charul Vyas, a senior wireless specialist at NPD Group. "This is one idea that may take time to change, which can provide other retailers with breathing room as they consider ways to keep the Wal-Mart leviathan from eating away at more wireless market share."

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