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Prepaid Wireless Tracker #47, May 2012 - Boost & Virgin Get 4G Hand-Me-Down Network
May 01, 2012

Prepaid Wireless Tracker - May 2012 Issue #47


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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Sprint Keeps Boost & Virgin Relevant With Hand-Me-Down 4G WiMAX
It would seem to make sense for Sprint to enable Boost and Virgin to access 4G phones.  Without 4G within the next year, Sprint would 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 at 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 make 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
After a failed launch in Target last year due to regional-only distribution, Cricket has now struck a national deal with the retailer.  It's always difficult to launch in a limited number of regional stores for a national retailer.  I'm actually surprised the initial launch was even approved.  With its unlimited Muve music service, I expect that with the right marketing and promotions, Cricket should be able to pull in some decent numbers selling phones in Target; we'll see!

Verizon 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 make a move into the prepaid smartphone arena.  It's unlikely, however, to get any material traction except for those Verizon die-hards who believe (mistakenly) that it's worth paying a premium for a Verizon prepaid plan.  I have no doubt that Verizon will ultimately 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 attention recently.

AT&T Beefs Up Prepaid GoPhone Data Allowance - But Still Uncompetitive
Technology Bloom News
Feeling the pressure due to prepaid wireless competition, AT&T beefed up its data plans:  $5 for 50MB, $15 for 200MB, and $25 for 1GB.  Of course, you'll still need to by an appropriate prepaid voice plan to go along with that.  Unlike Verizon, however, AT&T has 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 some 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
This 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 focus on providing better quality products, greater value, as well as better customer service.  These are all good things.  Unfortunately, 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 term values will ultimately reign as those around them struggle to survive.

MetroPCS Introduces Data Throttling To Control Costs
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.

What's New at

  • Updated 41 pages to ensure up-to-date material!

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