Prepaid Wireless Tracker - October 2014 Issue #76

Hi,

Prepaid wireless is a growing and truly exciting industry.  At Prepaid-Wireless-Guide.com 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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Cricket Continues Fighter Brand Spirit With Increased Data Allowance
Android Headlines
AT&T continues to be aggressive with its Cricket Wireless fighter brand by increasing the 4G data allowance on its smartphone plans.  Note that you still do get data access once you deplete your 4G allowance; it's just really really slow (this is contrary to what the article infers).  Slow is better than nothing though, and if you get on the right plan, and leverage WiFi while at home, the new plans should feel unlimited to most.  In addition to their current $100 offer for customers switching from T-Mobile, they'll also allow you to have up to 5 lines for $100, compared to T-Mobile's 4 lines.  While I don't believe this price war is sustainable, you can bet that AT&T will remain standing regardless, and in the meantime customers win with lower prices!

Sprint Finally Makes Prepaid Brand Competitive
Twice
If you recall, Sprint initially launch its no contract brand as "Sprint As You Go" in 2012, and later changed it to simply "Sprint Prepaid".  Well now its actually changed meaningful elements of the program: more plans, better phones, better prices, and more data.  The plans start at $35 and are actually quite competitive, particularly compared to its previously lack luster program.  I certainly don't envy the Product Managers working on Sprint Prepaid.  Trying to keep these plans competitive while not cannibalizing the postpaid, or prepaid Boost and Virgin plans has got to be a daily struggle with management.  Personally, I think they should dump Boost and simply keep the Sprint Prepaid brand, and even potentially eliminate Virgin, although the brand equity there is likely quite strong and more difficult to let go of.

Franchisees To Take On Risk Of T-Mobile's Simply Prepaid Strategy
Android Headlines - Android News
Last month I reported that T-Mobile was launching a new retail strategy whereby it would combine three of its MVNOs into one store, namely GoSmart Mobile, Univision Mobile, and Ultra Mobile with its T-Mobile prepaid brand.  They're taking a franchise approach, which makes the most sense, for if these independent wireless dealers fail it's operationally and financially less expensive for T-Mobile.  Thus far they're reporting that these combo stores are outselling stores in similar locations, however, they don't provide specific data.

I'm hesitant about this approach due to the fact that the value of an MVNO, and the only way it can survive, is if it targets a specific niche, or even sub-niche.  Having them all in the same location doesn't seem to address what should be a demographic difference/requirement between the brands.  Perhaps the higher T-Mobile sales are simply due to the increase in advertising from these locations.  Nevertheless, I'll continue to track this little experiment!

Boost Gets iPhone 6
Kansas City Business Journal
Boost Mobile's site still doesn't list a date or pricing, however, this is definitely good news for no contract customers.  That said, prepaid is no longer the evil stepchild of the industry, and top tier phones have long since been available on most prepaid carriers.  I expect that going forward I won't be reporting iPhone or Galaxy S series phone availability as news; it's to be expected, and falling short of launching at the same time as on postpaid is quickly becoming unacceptable.  Still no word on availability on Virgin, however, it's inevitable given that Virgin was one of the first prepaid carriers to offer the iPhone (just weeks behind Cricket), while Boost took quite a bit longer to get this flagship device.

AT&T Expands GoPhone Brand to Home Phone & Mobile Hotspot
SlashGear
AT&T is getting creative by expanding its no contract GoPhone brand to a wireless home phone and mobile data (i.e. mobile hotspot) offer.  $60 gets you 5GB of mobile data, while $80 gets you 10GB.  Bundling services is always a good strategy if you can include services that people actually want.  As a mobile hotspot offer, it's really nothing special, however, if you actually have a wire line home phone, AND want mobile broadband for your laptop or tablets, this could be pretty compelling.  From what customers are telling me, pay-as-you-go mobile broadband plans whereby data purchased never expires is really where the demand is.

T-Mobile Gets Aggressive With Trade-In Offers
eWeek
You've gotta love competition!   If you find a better price, T-Mobile will match it and throw in an additional $50.  When I first saw this campaign, it made me think of other carriers that are touting the same thing.  Well, not every carrier can offer the best trade-in at the same time!  With all of these incentives, including lower price plans and larger data buckets, it seems just as expensive as handset subsidies that all carriers have been running away from, particular prepaid providers.  This campaign no doubt aligns with the flurry of iPhones loyalists who now finally get to use a smartphone with a respectable screen size (i.e. the iPhones 6).  I expect the market for "previously enjoyed" iPhone 5 smartphones will be very lucrative this coming year!

Cricket Wireless Forms Odd Relationship With GameStop
USA TODAY
Cricket has now formally announced that it has partnered with GameStop to carry its phones.  AT&T is looking to grow Cricket, and GameStop is no doubt seeking additional revenue opportunities.  Sounds like a great match, right?  No doubt Cricket selected GameStop due to it likely being much less expensive for them than most other popular retailers where prepaid wireless is already popular.  Personally, I don't think this is a compelling channel, and certainly won't materially move the acquisition needle.  It sounds like a great place for an impulse purchase, however, if you're actively seeking a prepaid phone, will you go to GameStop even if you're aware that they carry Cricket?  It will be interesting to see how long it takes for this program to be shut down.  Given executive egos at play, expect a very slow death.  Sorry Cricket, just being honest.


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Cheers!
PrepaidWirelessGuy