Virgin lowers rates as prepaid competition heats up
Prepaid is the most competitive market in wireless now as more carriers innovate, MetroPCS reports record quarter
Virgin Mobile today reduced its $80 all-you-can-eat calling plan to $50 and added unlimited night and weekend minutes to its lower-cost plans. Sprint's mobile virtual network operator (MVNO) also introduced the ‘Pink Slip Protection' program, in which it will pay a customer's cell-phone bill for up to three months if that person loses his or her job. The carrier is responding to increased competition amongst regional players as its rivals continue to out-innovate the tier-one carriers and MetroPCS reports its best quarter yet.
MetroPCS, which specializes in local calling plans, said this week that it added 684,000 subscribers in the first quarter of the year, up 51% from the first quarter of 2008. Its total subscriber base is now 6.1 million. While churn was 5% in the first quarter, up 1% year-over-year, Metro's net customer additions surpassed the prior quarter's record by 32%. Like fellow regional CDMA player and roaming partner Leap Wireless, Metro offers unlimited prepaid plans ranging from $35 to $50 per month. Boost Mobile, Sprint's other value brand, also recently introduced an unlimited plan with no hidden fees for $50, followed shortly after by T-Mobile, which is trialing $50 unlimited plans for its existing customers.
The tier-two market is clearly the most exciting segment of wireless today, according to Whitey Bluestein, founder of strategic advisory firm Bluestein & Associates. These carriers are expanding and experimenting more than their larger peers, and it's showing in their results. The value providers are slicing and dicing plans, features and services to find new subscribers anywhere they can, he said.
"All the excitement, growth and innovation on plans is all coming from the so-called prepaid or hybrid market," Bluestein said. "You can pay twice as much to sign a long-term contract and have a better choice of handsets and a little better roaming possibilities, but I think for a lot of people who are looking at expenses, especially in this economy, [prepaid] will be an increasingly compelling proposition. There will be a lot of continued growth in this space in the market, and I think it will increasingly put pressure on the big guys to play in this space."
Leap and Metro have been encroaching on the national carriers for some time now, attracting landline cutters and a growing segment of cost-conscious consumers who rarely travel. Metro recently completed its Northeast push by expanding into two of the largest US markets, New York and Boston, with CDMA networks built by Alcatel-Lucent in early February, following a launch in Philadelphia last summer. It now provides unlimited service in nine of the top 12 markets in the US and services beginning at $45 per month in 92 of the top 10 markets. Leap's Cricket Communications service had nearly 4 million customers at the end of 2008 and is forecasting customer additions exceeding 1.5 million this year.
Want to use this article? Click here for options!
© 2013 Penton Media Inc.
In this Webinar you will learn how to create a real-time relationship with your customers, how to proactively improve the customer experience, and how to successfully target and cross-sell services to boost incremental revenue.
- Megabytes to Megabucks, Bandwidth to Business Models: How 4G Is Changing Everything
- How to Unplug Your Redundant Telco Apps To Save Money and Improve Efficiency
- When IaaS Isn't Enough: Service Provider Business Models to Drive Growth and Build Margin
- How to Transform Your Aging Telco Voice Network to Drive New Profits and Revenue
- Creative Licensing Approaches for Telcos & Their Network Equipment Vendors
- Smart Home Opportunity: Balancing Customer Data & Privacy
This paper discusses the rise of Diameter and benefits of Diameter Protocol.
- Conducting The Orchestration – Order Management at the Speed of Business
- Toward a Converged Network Edge
- Beyond Spam – Email Security in the Age of Blended Threats
- 6 Important Steps to Evaluating a Web Filtering Solution
- The Expertise to Protect You from Botnet and DDoS Attacks
- Seeing is Believing – Bridging the Order Visibility Gap
Service providers are under tremendous pressure to turn up new services faster then before and, at the same time,
to do it at less expense - and intra-office fiber is one of the biggest challenges in terms of both cost and service
From the Blog
Join the Discussion
Get more out of Connected Planet by visiting our related resources below:
Connected Planet highlights the next generation of service providers, as well as how their customers use services in new ways.Subscribe Now