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Prepaid Wireless Tracker, Oct 2011 - Verizon Takes Unleashed Nationwide - So What?!
October 01, 2011

Prepaid Wireless Tracker - October 2011 Issue


Prepaid wireless is a growing and truly exciting industry.  At Prepaid Wireless Guide I try to provide you with in-depth information that isn't readily available anywhere else.  Its content is original, and created from firsthand experience working in the prepaid wireless industry.

This monthly email provides you with a quick glance at what's in the news so that you can easily keep informed.  I believe in brief, to-the-point summaries/commentary so that you can move onto other tasks in your day.  Each snippet includes a link to the original story should you be interested in the full details.

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Verizon Unleashed Unlimited Going Nationwide
The nationwide rollout of Verizon’s unlimited prepaid plan is great news.  However, as long as it remains restricted to feature phones, it will never gain any real momentum.  It will be interesting to see how Verizon decides to compete in the prepaid space as no contract handsets become more powerful, with a large proportion of prepaid phone sales now being smartphones.

Sneaky: Boost Mobile to charge you $5 more per month if you use Android
Starting Oct 6th, new Boost customers using an Android smartphone will be charged $55 for its unlimited plan.  It still remains a good deal, and an inevitable price increase if it is to remain profitable.  No doubt competitors will eventually follow.  Unfortunately, it now loses the simplicity of its pricing model, which was simply $50 all-you-can-eat across the board (except for the BlackBerry premium of course, but who really wants one of those ;-); now pricing varies by device.

Boost Launches New Android 2.3 Smartphone
Boost to launch the Samsung Transform Ultra for $230.  Check out the specs; it’s interesting that not too long ago a 1GHz processor with dual cameras was considered high end.  I suppose the moderately sized 3.2 inch screen keeps the phone as mid-tier device.  Once the price drops to under $200, this will become their new high sales smarthphone. 

AT&T Adds $25 Prepaid Plan
At $25 for 250 minutes, unlimited text messaging, and the ability to add data, AT&T can now compete with Verizon’s offering.  Add to that the ability to use this plan on a smartphone (unlike Verizon’s prepaid plans), and AT&T appears to be adding some horsepower into its prepaid offering.  Slow to react, but they’re obviously spending more resources considering how to play in the prepaid space before they completely lose market share.

Leap Wireless Not Worried About Verizon Unleashed
TFTS (blog)
First I have to say that the reference to Jump Mobile (folded into Cricket years ago) is laughable.  What the article should have referenced was MetroPCS and Sprint (i.e. Boost and Virgin).  Anyway, I agree that Verizon’s plan is not much of a threat given that customers cannot activate smartphones.  The moment Verizon does so, Leap and Metro will be in serious trouble, though I don’t expect that to come for the better part of two years.

Virgin Mobile to Launch QWERTY Android JukeB Smartphone
It’s interesting how this BlackBerry (or legacy Treo) form factor is still considered to be low end.  I personally can’t stand the landscape sliding keyboards; what a pain!  The screen resolution is quite a surprise given that 320x480 is now seen as relatively low resolution (look at the Motorola XPRT/Droid Pro).  I suspect that a super high resolution screen, while likely not that much more costly on a phone this size, may yield text that is too small to read clearly.  That said, with these specs, I’d be surprised if it sold for $150 as predicted in the article.  At $99, this phone would be a reasonable buy for text entry centric users.

Leap's Cricket Prepaid Service Goes National
What can I say; launching with Monthly Bucket plans (as opposed to its standard Unlimited) is a mistake.  Plans under the same brand should NOT be different based on the channel in which it's purchased; that's a poor strategy and difficult to execute well.  I expect it has something to do with its MVNO relationship with Sprint (i.e. the cost structure).  However, while that's an explanation, it doesn't absolve it from being a bad strategy.  Cricket needs to be nationwide with its unlimited plans to truly prosper.  Hopefully it will get there before it's too late.

SIMPLE Mobile Intros All-You-Can-Eat Talk, Text and Web Plans Starting at $40
Simple announced a new $40 unlimited plan, which includes support for smartphones.  However, you'll want to bring your own phone, as the ones offered are limited, and the decent ones are quite overpriced.  I like Simple Mobile as an MVNO to keep an eye on, though if the AT&T merger with T-Mobile is approved, it will be interesting to see what happens to Simple.

epay Signs Long-Term Prepaid Processing Agreement for Boost Mobile, Virgin Mobile, Assurance Wireless
MarketWatch (press release)
epay signs an exclusive deal with Sprint for its prepaid brands in the indirect sales channel.  Given that epay, part of Euronet Worldwide, already had a dominant position in their indirect distribution network, I'm sure that Sprint negotiated a reduction in processing fees for an exclusive deal.  However, sometimes short term savings are not work the long term financial exposure.  Consolidating to one player in that space is a dangerous strategy that no doubt highlights the business' desire to avoid the natural complexities of indirect distribution.  While epay is a very reputable company in the prepaid industry, generally speaking, this is a poor strategy, likely stemming from a management structure that is fearful of the wild wild west that is the indirect channel.

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