MetroPCS adds subs, prepaid prices continue to drop

Another sign of the slowdown has been consistently falling prices across the board. Metro took that even further today. Taking a cue from competing provider, Sprint’s prepaid arm Boost Mobile, the carrier introduced a new set of four unlimited service plans with no hidden fees. The “Wireless for All” plans, starting at $40 to undercut Boost by $10, will give consumers nationwide unlimited talk, text and Web with all local and state taxes and regulatory fees included. This is an approach that Boost first took last January when it introduced an all-inclusive $50 plan, shaking things up in the prepaid space. Linquist said he anticipates the cheaper plans to hurt profitability initially, but also expects higher retention and a more stable customer base as a result.

The fourth quarter was also a mixed bag for fellow regional prepaid provider Leap Wireless (NASDAQ:LEAP). During an investor conference last week, Leap CEO Doug Hutcheson said Q4 net additions were about 300,000, 75% of which were voice subscribers. Most of these adds came late in the quarter when the company put out a $25 promotional plan, according to investment firm Piper Jaffray.

“While our checks also indicated that the average person taking this plan usually gets up-sold to the $30+ level, this is still less than the $39 average monthly spend,” the firm said in a research note. “Looking forward, we believe ARPU could continue to come under pressure and acquisition costs remain at elevated levels as Leap looks to maintain share.”

Prepaid has continued to a mixed blessing for all wireless providers. Cheap, unlimited plans have captured consumer interest in the past year as the economy worsened, but also caused competition to be at an all-time high, attracting more providers fighting for market share and bringing prices lower and lower – a trend that some believe can persist much longer.

In other prepaid news, at last week’s Consumer Electronics Show, Boost Mobile announced that its $50 unlimited plan would now also run on Sprint’s CDMA network. Presumably to keep Sprint’s $99 Simply Everything customers from switching to the new plans and stop consumers from roaming onto Verizon Wireless’ CDMA network, the plan will require new phones. Only two handsets, a Kyocera and Sanyo will work on CDMA when the plan becomes available tomorrow, but Boost is also offering a $60 BlackBerry unlimited plan for the Curve 8330.