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Prepaid Wireless Tracker #79, Jan 2015 - Last Year Was The Year Of Prepaid Wireless Maturity!
January 01, 2015

Prepaid Wireless Tracker - January 2015 Issue #79


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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2014 – The Year Of Prepaid Wireless Maturity!
This past year was a significant year for the prepaid wireless industry as it further ingrained itself into the mainstream.  We saw T-Mobile fiercely launch its “Uncarrier” campaign by eliminating its contract business in favor of device financing.  We saw AT&T double down with its purchase of Cricket (and elimination of Aio), and continuous battles between carriers trying to steal customers with cash back offers, and double data plans galore.

The fact is that the entire wireless market, including prepaid is essentially over 100% penetrated.  Thus, the growth we saw in the mid-2000s is over.  It’s now all about prepaid cannibalizing postpaid.  2014 represented bipolar behavior amongst the large postpaid carriers who see the writing on the wall, however, are fearful to cannibalize their more profitable postpaid customers too quickly.  Hence, while holding onto postpaid customers in one hand, they enhanced their prepaid offers on the other. 

Verizon was the only carrier to resist developing its prepaid offers.  In the short term they’ll benefit with higher revenue and profits, however, in the long term they’ll suffer the wrath when postpaid subscribership decline begins to accelerate.

Lastly, we saw BYOD (Bring Your Own Device) offers (and dedicated BYOD providers) proliferate this past year as the obvious customer acquisition strategy, particularly as 4G LTE technology, and multi-network capable phones became the standard.

We can expect next year to show a material acceleration of postpaid decline, and customers experimenting with different prepaid providers via BYOD programs.  Carriers will need to focus on customer service and overall customer experience, as we’ll be free to change carriers with little to no cost/consequence.

The barrier to new (non-BYOD) customer acquisition will be the cost of a new smartphone.  Additional incentives and innovation in finance/leasing programs will be additional points of focus in the coming year.

Cricket Wireless Attempts To Steal Customers With $100 Credit
If you’re thinking about switching to Cricket from one of the eligible carriers, this would be a good time.  However, a $100 credit really isn’t a compelling offer to speak of.  For example, T-Mobile will pay your early termination fee up to $350.  Unless you have a compatible GSM phone, you’re going to have to pay many hundreds of dollars for a new phone making the credit almost meaningless at that point.  Now if they up the offer to $300, then they would actually have a very compelling offer!

Sprint Prepaid Offers 1 Month Free In Best Buy
Sprint has been floundering with its Sprint Prepaid service since it initially launched.  I can’t imagine that a one month free offer will have any impact whatsoever.  Compared to the price of purchasing the required phone, which will be locked to the Sprint network, the value of a free month is wholly uninspiring. 

Most prepaid carriers used to offer the first month free as standard, however, the return policy resulted in major cost issues with customers returning phones and purchasing new ones on a monthly basis.  Yes, believe it or not, people would do this!  So much so that carriers have since eliminated this approach.

If they want to truly shake things up, they need to offer 3-6 months free, and/or offer 50-75% off the phone purchase (with no finance charges, contracts, or other early termination fees).  What likely happened is that Best Buy requested a promo, and this is the fastest, easiest offer they could put together.  Sorry Best Buy/Sprint, but this won’t move the needle!

NetZero Wireless Offers Free Phone
Prepaid Reviews (blog)
Similar to the sentiment of the article, I also almost completely forgot about this Sprint MVNO!  NetZero is definitely a respectable option for those looking for basic, straightforward service, and a low end phone that you can get for free.  It really is amazing how many MVNOs Sprint has on its network.

I regularly get inquiries from people wanting to start their own MVNO, which truly surprises me given the cost to startup, operate, and market a new service.  The reality is that aside from a few of them, most MVNOs don’t offer any services that are truly innovative to meet the needs of any particular niche.

While it makes sense for NetZero to offer phone service as part of its portfolio, I believe most MVNOs are simply seeking to acquire sufficient customers to sell out to a larger carrier for a relatively large payout.  Personally, I would stick to the larger prepaid providers unless you go with an MVNO that is offering a truly customized experience to meet your individual needs (like BYO Wireless below).

BYO Wireless Launches GSM 4G LTE & Doubles Data
PR Newswire (press release)
Double data offers are nice, however, my objective here is to highlight an MVNO that actually offers some really compelling plans that range from $5 to $70.  They’re a Bring Your Own Device (BYOD) only provider, so if you’ve got a phone lying around that you want to make use of, this is a great option.  They support CDMA and GSM phones. 

Truthfully, without their double data promotion, their higher plans aren’t very competitive, so hopefully they’ll convert it to their regular pricing.  It’s not unusual for carriers to test new pricing as promos so they can learn about its appeal and costs before making it standard.

BYOD is really the future of all wireless in this country.  Particularly given the quality of phones in recent years, there are just so many fantastic phones still out there that people can make great use of without having to spend hundreds of dollars (or sign a contract) to get a new phone that is only marginally better than one we already have collecting dust in their drawers.

Sprint Launches First Windows Phones on Boost & Virgin
It makes sense for prepaid to also offer Windows phones, which is great because that translates into more competition and options for customers.  Cricket has had Windows phones for awhile, so this is nothing new to prepaid.

Also, given Microsoft’s desperate need to gain presence in the phone/mobile OS game, there’s pretty good value in Windows smartphones.  While I personally haven’t used one, people I know who have swear by them.  I truly believe it’s a viable option, despite the fact that Windows will likely never get close to iOS or Android market share.

Comments? Ideas? Feedback? I'd love to hear from you. Just reply to this zine and tell me what you think!

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