Prepaid Wireless Tracker
- January 2015 Issue #79
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
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Tracker.
2014
– The Year Of Prepaid Wireless Maturity!
This past year was a significant
year for the prepaid wireless industry as it further ingrained itself
into the mainstream. We saw T-Mobile fiercely launch its
“Uncarrier”
campaign by eliminating its contract business in favor of device
financing. We saw AT&T double down with its purchase
of Cricket
(and elimination of Aio), and continuous battles between carriers
trying to steal customers with cash back offers, and double data plans
galore.
The fact is that the entire wireless market, including
prepaid is essentially over 100% penetrated.
Thus, the growth
we saw
in the mid-2000s is over. It’s now all about
prepaid cannibalizing
postpaid. 2014 represented bipolar behavior amongst the large
postpaid
carriers who see the writing on the wall, however, are fearful to
cannibalize their more profitable postpaid customers too
quickly.
Hence, while holding onto postpaid customers in one hand, they enhanced
their prepaid offers on the other.
Verizon was the only
carrier to resist developing its prepaid offers. In the short
term
they’ll benefit with higher revenue and profits, however, in
the long
term they’ll suffer the wrath when postpaid subscribership
decline
begins to accelerate.
Lastly, we saw BYOD (Bring Your Own
Device) offers (and dedicated BYOD providers) proliferate this past
year as the obvious customer acquisition strategy, particularly as 4G
LTE technology, and multi-network capable phones became the standard.
We
can expect next year to show a material acceleration of postpaid
decline, and customers experimenting with different prepaid providers
via BYOD programs. Carriers will need to focus on customer
service and
overall customer experience, as we’ll be free to change
carriers with
little to no cost/consequence.
The barrier to new (non-BYOD)
customer acquisition will be the cost of a new smartphone.
Additional
incentives and innovation in finance/leasing programs will be
additional points of focus in the coming year.
Cricket Wireless Attempts To Steal Customers
With $100 Credit
TmoNews
If
you’re thinking about switching to Cricket from one
of the
eligible
carriers, this would be a good time. However, a $100 credit
really
isn’t a compelling offer to speak of. For example,
T-Mobile will pay
your early termination fee up to $350. Unless you have a
compatible
GSM phone, you’re going to have to pay many hundreds of
dollars for a
new phone making the credit almost meaningless at that point.
Now if
they up the offer to $300, then they would actually have a very
compelling offer!
Sprint Prepaid Offers 1 Month Free In Best
Buy
FierceWireless
Sprint
has been floundering with its Sprint Prepaid service since it initially
launched. I can’t imagine that a one month free
offer will have
any
impact whatsoever. Compared to the price of purchasing the
required
phone, which will be locked to the Sprint network, the value of a free
month is wholly uninspiring.
Most prepaid carriers used to
offer the first month free as standard, however, the return policy
resulted in major cost issues with customers returning phones and
purchasing new ones on a monthly basis. Yes, believe it or
not, people
would do this! So much so that carriers have since eliminated
this
approach.
If they want to truly shake things up, they need to
offer 3-6 months free, and/or offer 50-75% off the phone purchase (with
no finance charges, contracts, or other early termination
fees). What
likely happened is that Best Buy requested a promo, and this is the
fastest, easiest offer they could put together. Sorry Best
Buy/Sprint,
but this won’t move the needle!
NetZero Wireless Offers Free Phone
Prepaid
Reviews (blog)
Similar
to the sentiment of the article, I also almost completely forgot about
this Sprint MVNO! NetZero is definitely a respectable option
for
those looking for basic, straightforward service, and a low end phone
that you can get for free. It really is amazing how many
MVNOs
Sprint has on its network.
I regularly get inquiries from people
wanting to start their own MVNO, which truly surprises me given the
cost to startup, operate, and market a new service. The
reality
is that aside from a few of them, most MVNOs don’t offer any
services
that are truly innovative to meet the needs of any particular niche.
While
it makes sense for NetZero to offer
phone service as part of its
portfolio, I believe most MVNOs are simply seeking to acquire
sufficient customers to sell out to a larger carrier for a relatively
large payout. Personally, I would stick to the larger prepaid
providers unless you go with an MVNO that is offering a truly
customized experience to meet your individual needs (like BYO Wireless
below).
BYO
Wireless Launches GSM 4G LTE & Doubles Data
PR Newswire
(press release)
Double
data offers are nice, however, my objective here is to highlight an
MVNO that actually offers some really compelling plans that range from
$5 to $70. They’re a Bring Your Own Device
(BYOD)
only provider,
so if you’ve got a phone lying around that you want to make
use of,
this is a great option. They support CDMA and GSM
phones.
Truthfully,
without their double data promotion, their higher plans
aren’t very
competitive, so hopefully they’ll convert it to their regular
pricing. It’s not unusual for carriers to test new
pricing as
promos so they can learn about its appeal and costs before making it
standard.
BYOD is really the future of all wireless in this
country. Particularly given the quality of phones in recent
years, there are just so many fantastic phones still out there that
people can make great use of without having to spend hundreds of
dollars (or sign a contract) to get a new phone that is only marginally
better than one we already have collecting dust in their drawers.
Sprint Launches First Windows Phones on
Boost & Virgin
Twice
It
makes sense for prepaid to also offer Windows phones, which is great
because that translates into more competition and options for
customers. Cricket has had Windows phones for awhile, so this
is
nothing new to prepaid.
Also, given Microsoft’s desperate need
to gain presence in the phone/mobile OS game, there’s pretty
good value
in Windows smartphones. While I personally haven’t
used one,
people I know who have swear by them. I truly believe
it’s a
viable option, despite the fact that Windows will likely never get
close to iOS or Android market share.
Comments?
Ideas?
Feedback? I'd love to hear from you. Just reply to this zine and
tell me what you think!
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Cheers!
PrepaidWirelessGuy
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