Prepaid Wireless Tracker
- December 2011 Issue
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Could Sprint's Galaxy S II Be Offered On
tier one carriers have never allowed their flagship phones to be sold
or activated on prepaid plans. While I still believe this is
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
can launch the latest high end devices. I expect there's a
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
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
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?
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
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