Prepaid Wireless Tracker
- March 2012 Issue
wireless is a growing and truly exciting industry. At
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with a quick glance at what's in the news so that you can easily keep
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so that you can move onto other tasks in your day. Each
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Prepaid iPhone Set to Disrupt Wireless
article speaks of TracFone's Straight Talk brand enabling a means of
activating iPhones on its unlimited prepaid service via a prepaid SIM
card. Easy access to iPhones on prepaid plans will certainly
cause some market disruption. The article, however, is wrong
when it states that this is currently not possible. There are
numerous ways to get an iPhone on a prepaid plan, though it usually
takes a little more knowlege, and the average consumer may not know
about it, or care to go figure out their options. The real
question of the day is when will a prepaid carrier proactively offer
its customers the iPhone as part of its device lineup. It
seems like an innevitable eventuality!
Virgin Mobile Wins Top Rank Overall
Customer Satisfaction by J.D. Power
Enhanced Online News (press release)
Virgin Mobile deserves cudos for winning the number one spot for
customer satisfaction, including the largest improvement year over
year. This progress seems in-line with Sprint's overall focus
on improving the customer experience across its postpaid business as
well. They'd better not celebrate for too long though, as
this is a fast-paced industry, and staying number one for a second year
may not prove to be very easy. There's no doubt that the
customer experience is at the top of most carriers (both prepaid and
postpaid) list of priorities, as they've come to appreciate that
keeping existing customers is far easier (and cheaper!) than trying to
capture new ones. This is the typical thought process in any
SIMPLE Mobile Partners with Fry's
Electronics to Promote Unlocked Handset Usage
Enhanced Online News (press release)
With Simple Mobile's partnership with Fry's they have created a
fantastic means of educating prospective customers regarding their
Bring Your Own Phone program, which allows customrs to use more than
200 approved GSM devices with its affordable no contract service.
Believe you me, it won't be long (ok, maybe the better part
of 10 years) before North America becomes more open, allowing customers
to activate any compatible phone on the service provider of their
choice per the European model. This would result in higher
handset prices, and carriers would need to innovate in other areas
other than device differentiation, however, in the long run, consumer
pricing would improve, and our options would increase.
PlatinumTel Launches New Unlimited Plans
PlatinumTel announced the launch of its revised unlimited plans; a $45
and $55 plan both with unlimited talk and text, with the former
including 150MB of data, while the latter includes 2GB of data.
While still not in the realm of other similar services that
include unlimited data as well, it's closer to the market reality than
it was before. Also note that these plans on Android
smartphones will cost you $5 more per month.
Ready Wireless Partners with Telespree
This partnership with Telespree will result in a handset application
that will allow users to monitor their mobile broadband data usage (not
phone usage). This will be a nice way to enable mobile
broadband users to ensure we topup our account before running out of
data in our monthly bundle. This application also begs the
question as to whether Ready Mobile will eventually offer a
pay-as-you-go mobile data offer to its portfolio; something that
wireless customers have been begging for from prepaid wireless
broadband providers for a long time. Currently TruConnect is
the only prepaid provider that offers this capability. Also,
something else to take notice is the indirect announcement that Ready
will be adding a mobile hotspot device to its portfolio, though their
website does not yet reflect its availability.
Mixed Results for Leap Wireless
Overall, Cricket Communications (a subsidiary of Leap Wireless)
reported pretty decent subscriber and revenue growth compared to
previous quarters, however, they still managed to lose over $84M.
It never ceases to amaze me how relatively large U.S.
companies can sell so much product, however, still manage to lose
money. I suppose that's the American way. However,
when all is said and done, companies need to be profitable or someone
(i.e. investors) will ultimately need to eat the loss.
Hopefully 2012 will show an even larger turnaround with
greater strides towards profitability as it continues to rollout its 4G
strategy, and focus on its smartphone portfolio.
Cricket Likely to Proceed with International
With the success of its unlimited Muve music offering (now over 500K
subscribers), Cricket announed that it has plans to expand the service
to international prepaid wireless providers via a licensing deal.
This is definitely an interesting new venture that could
yield a meaninful cash flow proposition for the struggling carrier.
That said, while I don't know the specific financials, I
would venture to conclude that with the current pricing Muve in its
current flavor doesn't drive a lot of net profit for the company due to
low margins, but rather contributes to longer customer lifetime value
due to the stickiness of the service in conjunction with smarthphone
users. While it's far to early to declare success, at this
point in time it certainly holds a lot of promise.
Apple Will Not Make a Cheap iPhone for
This articles makes a lot of sense, HOWEVER, the iPhone really isn't
any more expensive to produce than any other high end smartphone. In
fact, it's arguably less expensive given it's small screen, generally
lower specs, and high production volume. Apple simply chooses to
maintain a high margin, and the allure of better quality In
addition, despite the nice premium look and feel of the phone's casing,
most people put it in a case to either personalize its look, or out of
necessity to combat its antenna defect. That said, the
prepaid market WILL have the iPhone one way or the other, whether via
phone unlocking (see above Simple Mobile article), or via direct deals
with prepaid wireless carriers; it's only a matter of time!
Sprint Fails to Purchase MetroPCS
Apparently the deal was close to being announced when the Sprint board
of directors trashed it. Other articles noted that the cost
was simply too high, and would dilute the value of the Sprint stock
even further once investors weighed in, as they were going to pay a 30%
premium. The article notes that MetroPCS shareholders would
own one third of the combined company. To me that makes
absolutely no sense given the scale of the Sprint business versus that
of Metro; something simply doesn't smell right with this deal.
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