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Prepaid Wireless Tracker #72, June 2014 - New Cricket Launches On AT&T 4G LTE Network
June 01, 2014

Prepaid Wireless Tracker - June 2014 Issue #72


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.  The content is original, and created from firsthand experience working in the prepaid wireless industry for over a decade.

This monthly email provides you with a quick glance at what's trending 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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AT&T Launches The New Cricket

On May 18th, AT&T relaunched the combined Aio and Cricket companies as the New Cricket riding on the AT&T GSM/LTE network.  They offer a $25 unlimited plan for feature phones, and $40, $50, and $60 plans for smartphones, which only vary by the included amount of high speed data.  The plans are decently competitive, and on a great network.  You can also get $5 off each month if you enroll in Auto Pay with a credit or debit card.

Recall that if you're a legacy Cricket (i.e. CDMA) customer, you can migrate your service and any credits you currently have, however, unless you have an iPhone, you'll need to purchase a new phone.  If I were you, and have a decent phone that you can continue to happily use for awhile, I would hold out migrating as you should expect to receive an offer (i.e. a financial incentive) to move!  Or you can search for an unlocked GSM phone on eBay (make sure it's not stolen or otherwise on a black list!).

In addition, if you a big user of Cricket's old international plan, you'll be disappointed with their pathetic new offering; they'll need to fix that.  Also, you'll lose your Muve music app when you move to the AT&T network with the New Cricket.  Overall, it's the legacy Aio executives (i.e. minimal prepaid wireless experience) running the show, while legacy Cricket employees are job hunting; at least those unwilling to move the new headquarters in Atlanta.  Hopefully they can retain enough good people to beef up the New Cricket programs.  With AT&T cash, this brand could really take off.

AT&T To Kill Muve Music
New York Times

So AT&T is selling off Cricket's unlimited Muve Music service despite it being reported as the most successful subscription service ever to launch in the country.  Perhaps that reputation includes some rhetoric as Cricket included the service as part of all of its plans after having difficulty selling it as a separate add-on.  That said, my understanding is that customers who use the service really like it.  It really is a great deal, and for music lovers is a clear differentiator from other wireless services.  No doubt this sell-off has something to do with its recent deal with the more recognizable Beats brand, as well as the massive investment that would be required to improve the Muve app and service.  Note that legacy Cricket CDMA customers can continue to use the service for at least the better part of the next year.

Pro-Marijuana Prepaid Wireless Service Launches
Broadway World

I thought I'd see it all until I discovered this new AT&T MVNO!  Their mission is to support efforts to legalize marijuana, and as such donate 20% of their revenue to NORML, a pro-marijuana advocacy organization.  Their plans are in the realm of competitive, but nothing special from my perspective.  If you want to support this cause, it's questionable whether your dollar is going further taking this route.  At the surface it would seem so, for the slightly higher cost of the plan compared to other carriers would probably get you a larger contribution to the cause, assuming you wanted to donate every month for years.

The real question is whether this company will survive.  Prepaid carriers need approximately 40% margin to be healthy.  Giving away 20% of its revenue doesn't smell like a sustainable/profitable business model to me.  It will be interesting to see what happens, however, I predict this company won't survive without considerably reducing its donation, even if donations to NORML are tax deductible.  I personally appreciate the entrepreneurial spirit, so this prediction does not bring me any pleasure at all, however, it seems inevitable.  If they can make it work, will every cause then launch their own wireless service?  Would you buy it, or just donate directly?

AT&T's New Cricket Offers Handset Financing
This article is a bit misleading as they basically took Legacy Cricket's financing programs and transplanted them into the New Cricket.  I still recommend saving up for the device that you want, and buying it outright, rather than essentially entering into a contract.  The benefit over the postpaid subsidy model is, however, that you can buyout the contract at anytime, and once you pay off the phone your monthly cost decreases.  This is in contrast to postpaid, where you pay the higher plan price indefinitely, even after you have long since paid off the subsidy.  Like it or not, these programs are here to stay.  If you can get approved for 0% interest, and don't mind having your cell phone on your credit report, it's a nice option if you really don't want to save up for the full cost of the phone.

Boost & Virgin Mobile Get Samsung Galaxy S5
CNET (blog)

This is great news, for any respectable prepaid carrier needs to have the latest iPhones and Galaxy S series phones (even at $600).  The next step in this progression is to launch in the same week as postpaid carriers; it's only a matter of time.  AT&T's Cricket needs to get this phone fast in order to present itself as a valid competitor.  Legacy Cricket (prior to AT&T) probably would have had this launched already.  I expect the acquisition activities slowed that down as they didn't want to launch the CDMA version just prior to offering its new AT&T LTE handsets.

Straight Talk Increases Data Allowance

Straight Talk's $45 plan now includes 3GB of data.  In my opinion, 3GB is the amount of high speed data that most people will never exceed unless you're a heavy streaming video user.  I personally usually stay around the 2GB mark, but sometimes come close to 3GB.  Note that I'm on WiFi at home at in the office, and have my camera set to only upload to Dropbox while on WiFi.

I was talking with some prepaid customers the other day who were still confused by the data limits as they were still under the impression that it's unlimited (according to the marketing).  Please note that there aren't ANY truly unlimited data plans in the country today.  Even those that don't specifically state what the high speed data allowances are still have "reasonable usage clauses".  Data usage is simply too high these days for carriers to affordably offer unlimited high speed data.  As networks evolve, this could potentially change, however, more than likely, customers will be expected to pay for the data we use.  This enables lower usage customers to take advantage of lower prices.  So long as carriers continue to increase the allowances as customer usage needs evolve (i.e. increase!), this really shouldn't be a concern.  Good move Straight Talk!

Boost Mobile Launches New Plans & Kills Shrinkage

So Boost eliminated its Shrinkage plans, which allowed you to reduce your plan price by $5 after 6 on-time payments, up to $15 off per month.  They now have what they're calling Monthly Unlimited Select plans, which simplify their portfolio at $40, $50, $60 price points.  I would have expected that the loyalty encouraged by its Shrinkage program would have offered higher overall customer lifetime value, and is certainly a good deal for customers.  Without inside information it's impossible to know whether Shrinkage wasn't profitable, or whether it was too confusing for customers, and operationally expensive to support.  Also note that while their plans are comparable to the competition, they don't offer any discount for enrolling in automatic payments, as does AT&T New Cricket, who also offer the same price points.  I'll try to find out the story behind this change.  Perhaps it's as simple as someone mandating that if they are to offer a $40 plan, they can't afford to offer Shrinkage.  To add to the confusion, they still offer their Shrinkage plans online along side these new plans...hmm...

Ready Wireless Wins Fastest Growing Company Awards!
Corridor Business Journal

Ready Wireless (a Sprint MVNO) won an award for one of the top 25 fastest growing companies.  In the wild-wild-west of the prepaid wireless market, and particularly brutal in the world of MVNOs and MVNEs, this is a fantastic accomplishment.  Congratulations Ready Wireless team!

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