Prepaid Wireless Tracker
- May 2012 Issue #47
wireless is a growing and truly exciting industry. At
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Sprint Keeps Boost & Virgin Relevant
With Hand-Me-Down 4G WiMAX
would seem to make sense for Sprint to enable Boost and Virgin to
access 4G phones. Without 4G within the next year, Sprint
not be able to compete in the prepaid space as all carriers are moving
to 4G. It's also understandable that Sprint would attempt to
least appear to maintain some degree of differentiation between the
prepaid and postpaid services by moving its postpaid business to its
next generation 4G network. That said, from a practical point
of view, I don't know that consumers can really tell the difference
between 4G WiMAX and 4G LTE. Also, at some point, it won't
any sense for Sprint to maintain both 4G networks and phones, so
prepaid will ultimately need to move to LTE. This seems like
a decent interim strategy at this point.
Target Gives Cricket Another Chance
a failed launch in Target last year due to regional-only distribution,
Cricket has now struck a national deal with the retailer.
always difficult to launch in a limited number of regional stores for a
national retailer. I'm actually surprised the initial launch
even approved. With its unlimited Muve music service, I
that with the right marketing and promotions, Cricket should be able to
pull in some decent numbers selling phones in Target; we'll see!
Launches $80 Prepaid Smartphone Plan
Likely to be unlimited talk, and text, with 1GB of data. This
offer is pretty sad. There's no doubt that Verizon needs to
a move into the prepaid smartphone arena. It's unlikely,
to get any material traction except for those Verizon die-hards
who believe (mistakenly) that it's worth paying a premium for
Verizon prepaid plan. I have no doubt that Verizon will
reduce the price of this plan. At $80 it simply isn't a
competitive offer. That said, it's good to see even the big
carriers who previously brushed off prepaid continue to give it more
AT&T Beefs Up Prepaid GoPhone Data
Allowance - But Still Uncompetitive
the pressure due to prepaid wireless competition, AT&T beefed
its data plans: $5 for 50MB, $15 for 200MB, and $25 for 1GB.
Of course, you'll still need to by an appropriate prepaid
plan to go along with that. Unlike Verizon, however,
a broader selection of smartphones available on its prepaid GoPhone
plans. That said, similarly to Verizon, these plans are
uninspiring and wholly uncompetitive given the prepaid landscape. You'd
really have to believe in the AT&T network, or otherwise have
emotional bond with the company to prefer their plans over other
prepaid leaders currently in the market.
Customer Loyalty Is a Challenge In The Prepaid Market
is a good discussion. While it's pretty self-evident that
postpaid churn (an indication of loyalty) is lower than prepaid (due to
the contract!), it certainly speaks to the myriad of competitive offers
in the market today. Of course, with prepaid it's easier to
switch, however, prepaid customers often have a higher investment in
their handset due to the higher upfront cost. Companies that
promote or encourage SIM swapping, or bring your own phone programs
have also contributed to customers having far more choices than in the
past. Overall, this movement certainly forces carriers to
on providing better quality products, greater value, as well as better
customer service. These are all good things.
carriers are still struggling to focus on these elements which require
long term vision and investment, which is not often supported by the
quarter-to-quarter net figures that analysts tend to reward or
penalize. Carriers that can organize around these core long
values will ultimately reign as those around them struggle to survive.
MetroPCS Introduces Data Throttling To
So Metro upped the price of its unlimited plan from $60 to $70; the new
plan remains with unlimited data. However, all of
their lower cost plans will have data caps. For
example, the new $60 plan will have a 5GB cap on 4G data, after which
it will revert to 3G. Let's get real here. Carriers
need to control data limits or they won't be profitable, which
ultimately leads to less competitors, which is ultimately bad for
customers. 5GB of data on a phone is very reasonable.
Even on a mobile broadband device 5GB is reasonable, though
fast becoming a little short for those who consume a lot of video.
Regardless, dropping down to 3G after 5GB is a reasonable
approach for at least the next 18-24 months. Most customers
won't exceed 3GB per month anyway, and 5GB should really be plenty for
98% of users. I'd rather drop down to 3G than experience the
complete throttling that Cricket currently does, which takes customers
down to virtually useless dial-up speeds. The days of truly
unlimited data for a fixed price are over, unfortunately. We
need to adapt, and select carriers that offer the best alternatives
(i.e. the best throttled speeds, or the best value for additional data
bundles). However, carriers also need to stop advertising
unlimited plans with fine print indicating slow throttled speeds or
upper limit caps.
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