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Prepaid Wireless Tracker #59, May 2013 - Carriers Make Frantic Moves As Competition Heats Up!
May 01, 2013

Prepaid Wireless Tracker - May 2013 Issue #59

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

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Virgin Offers $100 To T-Mobile Customers
FierceWireless

In response to T-Mobile's aggressive move to no contract plans, including device financing, Virgin is offering a $100 credit to defectors for the month of May.  These types of credit programs are usually offered either when companies don't have time to react with a meaningful change to its core offerings, or when it actually believes they have an equal or better offer that just needs a little more attention given competitive pressures.  Depending on whether you're in need of the hotspot feature, which T-Mobile includes (Virgin charges $15 extra), T-Mobile may actually be a better option.  Regardless, there's absolutely no doubt that the prepaid war will continue to be hot in 2013, which means great value for customers.

Cricket Launches Family Plan Bundle & Aligns iPhone Plans With Android
CNET

Effective April 21st, Cricket started offering two smartphone plans for $40 each (down from $50 for a single line of service).  Note that in order to get that pricing, the account needs to be on automatic bill pay, which supports credit cards, debit cards, and electronic checks (i.e. bank accounts).  Cricket's iPhone is also now compatible with all of its plans, which were previously Android only.  So now iPhone users aren't stuck with just a $55 plan, but can choose from a $50, $60, and $70 plan, which include 1GB, 2.5GB, and 5GB of included data, respectively.  It's clear that in the wake of T-Mobile's new focus on prepaid, and a general need to grow its subscriber base, Cricket is doing everything it can to promote the lowest possible price with the greatest possible value, while still maintaining profitability.  The article also correctly points out that staying competitive (and profitable) will continue to be a challenge if Cricket remains as an independent carrier.

T-Mobile To Keep GoSmart Mobile Brand After MetroPCS Merger
FierceWireless

GoSmart, T-Mobile's new prepaid brand just went nationwide in February, will still be part of its portfolio despite the merger approval.  It actually has a much clearer distinction from MetroPCS' offerings than Sprint has with Boost and Virgin.  GoSmart is much lower end, and remains on its 3G network with limited phone selection.  To the contrary, MetroPCS is higher end, with more plan offerings, and large phone selection.  Of course, it will all come down to execution once the now approved merger closes, and T-Mobile integrates MetroPCS into its core business.  It will be interesting to see how its portfolio looks a year from now.

TracFone Reports Amazing Growth, Beating Verizon - iPhone On Straight Talk Suspected
GigaOM

After Straight Talk started selling the iPhone, it reported extremely respectable growth, the likes of which we haven't seen in the prepaid space for quite some time; they even beat out Verizon postpaid!  Whether its solely due to the iPhone, or a combination of that iconic phone, as well as other compatible unlocked smartphones that can be brought to Straight Talk is unknown.  I suspect it's a combination of access to these phones, as well as the way Walmart makes it easy to spread out payments over 26 months.  It's arguable whether its pricing is better than T-Mobile's new financing program, however, Walmart is the largest retailer on the planet, and customers will often go with that brand as a matter of habit and comfort.  Regardless, getting the iPhone finally launched is a huge benefit, and TracFone is no doubt enjoying it!

Verizon Launches $35 Prepaid Plan
CNET

The plan includes 500 minutes and unlimited text and Web, however, before getting too excited, this plan is only compatible with select feature phones.  When compared to other carriers, like Page Plus (also on the Verizon network), Cricket, Boost, Virgin, and others, it really isn't compelling whatsoever.  It's yet another inch forward for Verizon as it continues to tweak its prepaid offerings.  I still believe that when the time comes for Verizon to get serious about prepaid, they'll be ready to hit the ground running.  In the meantime, Verizon is simply dabbling with non-competitive plans, and perhaps keeping some postpaid customers on prepaid rather than losing them.  Of course, these are die hard Verizon fans who are willing to pay a premium for its service, and not necessarily those looking for the best value on the same or similar networks.

AT&T To Get More Serious About Prepaid

RCR Wireless News

Rumor has it that AT&T is launching a new prepaid offering outside of its GoPhone brand.  $50 for unlimited talk, text, and Web on feature phones, and $60 for 2GBs on smartphones, which may include refurbished iPhones and the ability to bring your own unlocked device.  I don't think this will inspire many folks, as the pricing is barely competitive, and unlike Verizon, that seems to be able to attract customers due to its brand reputation, AT&T has a long history of poor network performance.  That said, a move to bolster its prepaid offerings is long overdue.  We should expect to see AT&T continue to evolve its prepaid plans considerably over the next year as postpaid will continue to decline in favor of prepaid.

Telus To Take Lead Over Bell
Globe and Mail
The most notable aspect of this article is that Telus will be able to surpass Bell in growth due to its focus on getting more prepaid subscribers.  I expect that strategy was validated simply by looking at what has happened with wireless growth in the U.S.  i.e. No genius required to come up with that strategy!  Where Telus is still behind in its thinking, however, is that it's targeting youth for prepaid.  The real opportunity, which has already been proving out in the U.S., is that prepaid can appeal to the mainstream as well.  Structured correctly, carriers can maintain profitable growth with prepaid, and hanging on to historically higher postpaid ARPU will only serve to maintain higher gross margins within a declining customer base.  In other words, with wireless saturation at nearly 100%, the pie isn't growing; getting more share of the soon to be larger prepaid pie is what carriers need to be focusing on.  Higher ARPU within a declining postpaid base is far from being a wise strategy Bell!


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PrepaidWirelessGuy

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