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Prepaid Wireless Tracker #66, Dec 2013 - T-Mobile Continues Their Attacks!
December 02, 2013

Prepaid Wireless Tracker - December 2013 Issue #66


Prepaid wireless is a growing and truly exciting industry.  At 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.

This monthly email provides you with a quick glance at what's trending 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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T-Mobile On The Attack With MetroPCS Brand
Investor's Business Daily

Following notable success re-launching itself as the "uncarrier" (meaning no contracts, device financing, additional included features, etc.), T-Mobile went on the attack in late November with its classic prepaid brand MetroPCS, which it acquired earlier in the year.  That rollout has already seen early success, and has direct competitors like Cricket taking notice.  This past year has been a huge transition for T-Mobile; almost as if it were given a "do or die" directive from its board of directors.

Fortunately for them, and surprisingly so, it has shown impressive success, with major players in the industry playing catch-up.  I honestly never thought they would see this kind of success so quickly.  It will be interesting to see whether T-Mobile can sustain this momentum despite the increase in competition that they will inevitably see during the coming year.

Verizon Offers Lame $5 Per Day No Contract Data Plan For Connected Devices
Verizon is offering $5 for 300MB for one day of access; no contract required.  Many customers will initially find this appealing as it caters to customers who only want short, quick access to non-multimedia content (i.e. Internet browsing, email, Facebook, Twitter, and the like).  However, the per megabyte cost is extremely expensive.  Most customers are better off using local free hotspots, or even purchasing a no contract mobile hotspot modem, some of which now offer pay-per-use plans, and even free service (though free services still have limited coverage).

The reality is that this segment is a massive opportunity for carriers that is brave enough to mass market a true per use prepaid data plan where data doesn't expire.  Customers simply don't want to commit to a monthly data service when we only need access on occasion.  So all-in-all, don't get sucked into this seemingly inexpensive data option; there are better deals to be had with comparable service!

Verizon To Launch Moto G On Prepaid

Although the Moto G is considered a mid- tier smartphone, the specs are actually quite fantastic.  For $179 it has a high resolution 4.5" screen, 1.2GHz processor and 8GB of memory.  While this isn't as exciting as a new Galaxy or iPhone announcement, it speaks to a lot of prospective customers who want an extremely capable smartphone at an excellent price; look for it early next year.  I predict that 2014 will prove to be the year where smartphone capability and price off contract will severely depress the postpaid market as more customers come to understand that prepaid is no longer the second class citizen it once was.

Sprint Still Struggling With How To Break Last Barrier To Additional Prepaid Growth

This issue is nothing new, however, for some reason, Sprint is only now taking this topic seriously.  Now that phone selection is sufficient to compete with the best of them, prepaid adoption now boils down to the out-the-door cost of smartphones.  T-Mobile and Cricket spent the better part of 2013 rolling out device financing programs to help alleviate this pain point.  Early signals are that it's working well.  This article is long, but really boils down to "Sprint needs device financing as well"...!

The article doesn't talk about this next point, however, an area where it could have a competitive advantage over smaller prepaid providers is its access to large inventories of used and returned (like new) smartphones.  For me, that's the obvious play for Sprint, Verizon, and AT&T.  These carriers can also use their buying power (particularly now that Sprint is owned by Japan's SoftBank) to bring down the price they pay to phone manufacturers.  Ultimately, Sprint needs to stop being so paranoid that its prepaid business will cannibalize its postpaid business, and get a lot more aggressive (i.e. competitive) in the prepaid space.

Cricket Launches Refer-A-Friend Program
Sacramento Bee

In an attempt to gain customers after reporting a net loss (in both customers and revenue), Cricket fired up a refer-a-friend program whereby the referrer and the referee each receive a $25 account credit.  Customers can earn up to $500 per year.  Carriers have done this type of program virtually going back to the beginning of time.  I expect it will help with some gross subscriber lift, however, nothing anywhere near what they need to stop the bleeding.  In addition, customers willing to give up some personal information, could use social media as a means of racking up the referrals to prospective customers who aren't even friends.  That said, even if such abuse of the spirit of the program happens, it should still help to drive new customer growth for Cricket.  The real question is whether people can really get excited enough about $25 to sway their wireless carrier decision?

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