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Prepaid Wireless Tracker, August 2010 -- Sprint Prepaid President Resigns, Rogers Launches Chatr!
August 01, 2010

Prepaid Wireless Tracker - August 2010 Issue


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

This monthly email provides you with a quick glance at what's 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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Sprint Nextel Slices Prepaid Segment Even Thinner - RCR Wireless News
Sprint Nextel launched a new sub-brand called PayLo, which is a value voice offering under its, until now, data-centric Virgin Mobile brand.  While it’s good to see more choices for customers, I can’t help but think that Sprint Nextel is creating a mass of confusion with its myriad of prepaid brands and offerings, and now a sub-brand.  With Boost focusing on value voice plans (both CDMA and iDEN), does Virgin really need such an offer, and with a new brand nonetheless?  Some say it’s a brand demographic targeting technique.  Do you buy into that?  If you can get the phone and plan value you want, do you really care if it’s called Boost, Virgin, or even Sprint Prepaid?

Ready Wireless Announces Ready Broadband Launch in Fred’s Hometown Discount Stores
It’s great to see prepaid broadband continue to gain traction this year.  Let’s not take our eyes off Sprint MVNO, as they appear to be expanding their distribution and product appeal.  I look forward to the additional retail deployments noted in the news release!

Prepaid Wireless Pricing Wars - The Prepaid Press
There’s no doubt about it, despite what anyone is willing to admit, there’s been a price war since Boost launched its all-in Monthly Unlimited plan in 2009.  Now it’s time for prepaid carriers to focus on churn reduction (i.e. losing less subscribers), and profitable growth.  It will be interesting to see who can survive over the next few years. 

Sprint Takes Free Wireless Service to Florida Low-Income Households
Sprint expands its free Assurance Wireless program to Florida.  There’s no doubt that eventually there will be free programs available nationwide.

Sprint's Prepaid Chief Schulman Leaves Company - FierceWireless
Sprint Prepaid Group’s President, Dan Schulman, makes a surprise exit after launching a mess of myriad of new prepaid brands.  My theory is that Schulman has been job searching since realizing that working with the Sprint organization was much more challenging than he ever thought it would be (from a development/IT perspective) in terms of not having the autonomy to do what he wants as fast as he wants.  The 2Q10 results announced this month showed pretty weak prepaid performance compared to 2009.  I have a feeling that since joining Sprint, the Boost business has been negatively impacted.  i.e. Schulman either saw the writing on the wall, or was given a heads up from his old buddy Hesse to start looking.  I have a great respect for Schulman, and no matter how things went down over at Sprint-land, he contributed a lot to the prepaid space over the years, and I'm sure he'll be successful at AMEX.

New Prepaid Phone Legislation May Compromise Consumer Privacy
Daily Caller
Requiring ID to purchase a prepaid phone is not a new concept, and surfaced again over the past few months.  There are so many issues with this idea, and the cost and complexity of implementation that I doubt we’ll see this in play anytime soon.

Verizon Trials $50 Prepaid Unlimited Plan
Verizon is targeting the offer as a save program across the Southeast only.  Definitely a wise move.  Though let’s not get too excited, for without data included, the plan truly isn't all that inspiring.  I expect that ultimately they'll have to include data.  That said, depending on their business model, they may be better off letting their MVNOs capture this market for them. 

Rogers Launches Chatr Wireless Prepaid Brand - Competitor Lawsuits Follow
Rogers launched a flat rate monthly unlimited plan to compete with disruptive carriers that recently launched in Canada.  Mobility and Wind Mobile have taken legal action under the premise that Rogers is violating the competition act by abusing its dominant position in the marketplace.  I think such a lawsuit will be hard to prove, and ultimately Rogers needed to react.  If they’ve learned anything from the prepaid wars in the U.S., they know that they must not ignore the plight of prepaid carriers who will undoubtedly take over the postpaid market.

Wal-Mart Wireless Service to Include AT&T Phones
Previously only on Verizon’s network, TracFone will be expanding its Walmart Straight Talk offer to AT&T’s network. TracFone currently offers its TracFone branded products on both networks.  This is a true testament to the success that prepaid unlimited plans have had.  This, and other programs, are no longer trials, and retailers recognize the value they bring to the business. 

Despite Adding Customers, Sprint Still on Shaky Ground
Q2 2009 – 777K net subscribers; Q1 2010 – 348K net subscribers; Q2 2010 – 173K net subscribers.  Need I say more?  The 2009 launch of their all-in Monthly Unlimited plan shook up the market, and even yielded industry rewards, however, over the following year as the competition easily dropped their prices, Boost’s success has plummeted.  Am I the only one who doesn’t see this as a surprise?  After all, differentiation by price has never been a sustainable strategy; marketing 101, right?

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