Sprint Prepaid Wireless Strategy
Some pretty interesting stuff going on with Sprint over the past couple of years related to prepaid wireless! When they first launched Boost Mobile, the prepaid numbers weren't even available to the market as a separate business/division. Then as prepaid started to grow they started to break it out separately. When they did that, analyst gave them a lot of slack for having so much growth from what they considered to be a less profitable business.
Fast forward a few years and their prepaid division has saved them as Sprint Nextel continued to lose subscribers after the merger. Yet still they continued to get negative feedback from the market, and they really needed to get their postpaid business back on track. Well, although it seems to be getting somewhat better, their results are still poor. The HTC 4G Evo seems to be doing quite well in its first few days, but I don't think we know whether these are new customers, or existing customers upgrading. If they're new customers, that's great. If not, while the phone may be great, and very popular, if people don't believe enough in Sprint's network and customer service, they won't be able to grow. In fact, they may actually lose money on people buying what is likely a very highly subsidized device.
Anyway, back to prepaid. Now, as you discuss, they have four prepaid brands. I think the big question is whether this is going to set the stage for tremendous success in the years to come as prepaid wireless becomes more and more popular, or are they going to continue to bleed postpaid customers as people see Sprint more and more as taking focus off of postpaid?
I think it's a bold move to invest so highly in prepaid, and as a believer in no contract wireless, I think they're in for a good run. But I do believe that if it doesn't pan out for them, they're in for some seriously tough times, even worse than they experienced so far.
In theory, I suppose they can work on both postpaid and prepaid at the same time, however, with such a massive bureaucracy I can't imagine they'll have the proper focus to succeed in both businesses. And let's not forget their work on 4G. So many things going on over there. Hmm.... I'm curious to see how things look for Sprint-land five years from now!