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Prepaid Wireless Tracker #91, Jan 2016 - Last Year Was Evolutionary, Not Revolutionary
January 01, 2016

Prepaid Wireless Tracker - January 2016, Issue #91


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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2015 - Year In Review
At the end of each year I like to reflect on how the past year in the prepaid wireless industry has gone.  Overall, I would depict this year as evolutionary, not revolutionary.  2014 was a significant year of prepaid wireless maturation and mainstream acceptance, however, 2015 was more about tweaking than anything else.

We saw the most movement with the expansion of family plans, with an emphasis on data sharing.  Given that wireless is over 100% penetrated, carriers spent a lot of focus on offers to steal customers from one another, which is essentially the only way to acquire new customers these days.  Double data offers, and cash credits for switching were a large focus, as well as revamping existing plans with increased high speed data allowances.

Low cost smartphones with exceptional specifications were also pervasive this past year.  We also saw Cricket sell off Muve Music, and shutting down its legacy CDMA network after migrating all customers to AT&T 4G network.  In addition, TracFone launched a new brand, Total Wireless, emphasizing shared data plans, T-Mobile added data rollover to its prepaid plans, as well as launched Univision and GoSmart Mobile in Target.  The previously defunct Helio returned, and Google launched its much anticipated Project Fi no contract plans.  Lastly, TruConnect, previously a data only provider, launched prepaid wireless plans, including no data expiration, which is a first for the industry.

So while there weren't any revolutionary changes in the overall industry, we certainly saw new goodies launched, including increased international roaming offerings. There's certainly no doubt that prepaid is alive and well, and we continue to see the trend away from contract plans.  That said, while postpaid carriers are playing in the prepaid space, there's still a hesitation with Verizon remaining uncompetitive in prepaid, and Sprint trying to convert prepaid customers to postpaid.  It will be interesting to see how 2016 plays out!

New Provider Krew Mobile To Offer Free Lines For Kids
Marketwired (press release)

This is an interesting new MVNO.  For $39 per month, you get one parent line with unlimited talk, text, and data (2GB of highspeed data), and two free kids lines.  The kids lines can only communicate with parent lines unless given parental access, which can be up to 30 one hour blocks of unlimited talk and text per month.  Kid lines can also get data by accessing the parent's account hotspot.  It's not yet clear what network(s) it will run on.  I like the idea of parental controls, and free kid lines, however, I recommend comparing to Ready Mobile's child restriction capabilities.  I also think they tried to get too cute with the "Krew" name.   This service will be launching in 2016.  I'll definitely keep my eye on this launch!

Prepaid Wireless Customers In California Get New Surcharges
Capital Public Radio News

Surcharges have long since been added to landline and wireless users with contracts.  I'm not sure why prepaid wireless was able to avoid this tax for so long, though I certainly enjoyed saving all that money!  This surcharge is used to subsidize 911 services, as well as free phone service for low income households.  As prepaid wireless has become mainstream, California has come to notice the drop in income for these programs, or at least the lost revenue opportunity.  It makes sense that they would go after this easy money, though, unfortunately, that means that we all have to pay more.  You could always try activating with an out-of-state address that doesn't have these surcharges, though that would certainly be undermining the spirit of supporting these valuable programs.  The surcharges are effective today, Jan 1st, with a minimum of 9.26%.

Shaw Enters Canadian Wireless Industry With Wind Mobile Acquisition

Shaw, a cable and Internet provider, is purchasing Wind Mobile's less than 1M customer base for $1.6B.  Wind's pricing is very inexpensive compared to Canada's big three carriers, and was a refreshing competitor in the space.  It makes sense that Shaw needs to get into mobile, however, in the long run it seems unlikely that they will keep prices as low as they've been.  The reality is that the objective of Wind's shareholders was likely always to build the business up enough to cash out.  Canada has always had high prices (voice and data), and Rogers, Bell, and Telus never had any incentive to drive prices lower.  It's unlikely that Shaw's presence will do anything more than introduce a new brand to collude with the existing ones.

AT&T Mobility CEO Lurie Lacks True Insight Into Prepaid Wireless

Wireless Week

AT&T Mobility's CEO speaks to prepaid being about choice, and how they treat them as valuable customers rather than second hand citizens.  It's truly amusing to read about these so-called experts stating the obvious.  The fact that Lurie, and other's like him, get paid millions of dollars is truly remarkable (for them).  The reality is that Lurie knows very little about prepaid wireless, and any success Cricket has had under AT&T has been in spite of Lurie, not because of him.

Sprint Seeks To Convert Prepaid Customers To Postpaid

Sprint wants to lure the appropriate prepaid segment to move to what they deem their more profitable postpaid product.  What's truly laughable about this strategy is that prepaid has evolved so far that very few customers that are happy with prepaid will move.  Why would they?  The only benefit of postpaid is access to their roaming partners.  So if you're in an area with poor Sprint coverage, you'll have better coverage on postpaid, however, the subset of those customers really is small.

On the contrary, if you're not happy with your prepaid service (Virgin or Boost), you certainly won't want to pay more for a postpaid plan that also locks you into a contract!  The fact is that the entire industry is moving towards no contract prepaid wireless.  Learning how to improve the overall customer experience and quality will be the way to delivery high profit margins.  Cannibalizing prepaid customers to postpaid will not help.  If anything, they should be moving postpaid customers to prepaid, rather than lose those customers to T-Mobile, and other carriers with better service and coverage.

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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