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Prepaid Wireless Tracker, Dec 2011 - Flagship Smartphones On Prepaid; Is Sprint Brave Enough?
December 01, 2011

Prepaid Wireless Tracker - December 2011 Issue


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.  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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Could Sprint's Galaxy S II Be Offered On Prepaid?
Historically tier one carriers have never allowed their flagship phones to be sold or activated on prepaid plans.  While I still believe this is a long shot, if Sprint can muster up the courage to take this step, it will represent another inflection point of massive sales growth similar to what they saw when they launched Boost's initial $50 Unlimited plan.  This success trajectory is up for grabs for any prepaid carrier than can launch the latest high end devices.  I expect there's a LOT of debate concerning this strategy in Overland Park (Sprint's headquarters).  I'll definitely be keeping my eyes on this one!

Leap Wireless Expands Retail Distribution
Twice, by Joseph Palenchar
Cricket has been expanding its distribution for most of 2011.  The reality is that 2012 will be a make-it-or-break-it year for Cricket whereby it will either struggle to compete and begin a downwards spiral in a financial abyss, or prove itself as a formidable competitor in the prepaid wireless space.  It has all of the necessary components to achieve success, however, it will all come down to execution.  Fortunately, expanded distribution is a key component so that it can sell its nice lineup of smartphones.

MVNO H2O Wireless Eliminates Unlimited Plan
H2O doesn't get a lot of news play, and this change certainly doesn't fair well for the marginally interesting prepaid wireless provider.  As an AT&T MVNO, it's not surprising that they were forced out of the unlimited data play, as AT&T moved to tiered pricing earlier this year, and has clear bandwidth issues.  As H2O doesn't offer any smartphones, I don't expect this plan change will have any material impact on customers.  However, from a marketing and brand perspective, this change makes H2O even less of a player than it previous was (or really it was never a player at all).  Unless it makes some serious strategic changes, I don't expect H2O to ever become a viable competitor; oh well.

Kansas to Collect e911 Fee
Kansas is the next state to collect the e911 fee for prepaid wireless airtime sales.  With land line 911 revenue continuing to plummet as wireless takes over, it's inevitable that all states will ultimately implement this fee.  No one wants to pay additional fees, however, it is what it is, and we all need to accept it and get used to it!

Leap Wireless Shares Decline
Motley Fool
The reality is that most analysts lack the knowledge and expertise to really comment on the value of a company.  The fact that they still exist in this complex economy, and that people actually respond to their recommendations speaks to the sad state of our financial infrastructure.  That said, Cricket is on the fence (as noted previously), and investors should keep a close eye on them as they exit the Q4 holiday season, and how well they're able to grow in the first half of 2012.  Making any moves now really is premature, but for people who want to take advice from non-industry experts, all the power to you!

MetroPCS Customer Growth Slows
While I don't think it's time to report doom and gloom for MetroPCS, they're certainly showing signs of weakness as the prepaid market heats up.  Nationwide quality coverage with fully featured smartphones at competitive prices (under $200) will be critical for them in 2012.  A partnership/merger with Cricket seems less likely now than ever before if Cricket can pull off some respectable results next year.  It seems the tables are turning as Metro is no longer the dominant player in the unlimited market, but rather is seen as a regional-only player.

Clearwire Goes Prepaid Broadband Only
So Clear is exiting the postpaid contract market in favor of an unlimited prepaid wireless broadband plan.  All I can say is that while this is expected following its announcement to scale back its direct to consumer programs in favor of focusing on its wholesale partnerships, that doesn't make it a wise strategy.  Without 3G compatibility on Sprint's network, who in their right mind would buy a product from a company on the verge of bankruptcy with a 4G network technology (WiMAX) that is obsolete?  Yes, they will likely deploy LTE, however, their new plan doesn't offer anything compelling for prospective customers.  At this point I hope their wholesale partnerships are sufficient to keep them going as their consumer division is as good as dead. In terms of this particular offer, the only thing that comes to mind is "why bother?!"

What Will T-Mobile Do?
CNET (blog)
If the AT&T purchase of T-Mobile falls through, what will T-Mobile do?  This is the multi-billion dollar question!  If they're able to use the AT&T failed merger payout to build out they're 4G network, it's not inconceivable that they could dominate the prepaid wireless market, and develop lucrative partnerships with prepaid carriers seeking to expand 4G coverage quickly, and even partner with Sprint as they migrate to LTE.  This one will certainly be an interesting one to see play out.  What I've come to learn over the years is that the obvious, or most logical, or most practical strategies often don't play out with unexpected/odd approaches surfacing.  For some reason I don't think there will be an exception here; i.e. expect the unexpected!

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