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New plans don’t lead to more subscribers for Metro, Leap

Joe — Wed, 11 Nov 2009 13:30:11 +0000

We covered the quarterly results for both MetroPCS and Cricket late last week, though we didn’t get much further from the numbers. They are generally poor, which has caused them to revise estimates for yearly subscribers. Gary Kim of TMCnet takes a closer look at each company’s numbers and their adjustments. He presents some ideas in his post, and I’d like to combine them with one of my own.

Big carriers with big offerings

Verizon launched, among many other handsets, the BlackBerry Tour. It’s been known for some time that the Droid is on the way, too. AT&T released the iPhone 3GS at the end of the second quarter, with a big push coming in the third quarter. As far as prepaid is concerned, AT&T launched a $60 unlimited plan through GoPhone. Some customers, who would otherwise be attracted to prepaid, might have traded up for these new devices, or for AT&T’s plan. It seems like the least likely reason, though it probably had some effect.

Shiny new plans

As Kim notes, Straight Talk offers service plans comparable to Metro and Cricket at a good price. Add to that a nationwide network, powered by Verizon, and distribution at Wal-Mart (though that distribution wasn’t nationwide in the third quarter), and it means people might be looking to competitors, rather than Cricket and Metro. He doesn’t mention Page Plus, also powered by Verizon, which also introduced an unlimited plan in the third quarter. These new competitors definitely have an impact on Leap and Metro.

Both Cricket and Metro added more features to its service plans, essentially lowering the price, without actually lowering the price. For instance, the features available on the $45 plan moved down to the $40 plan. Yet even with these price adjustments both companies fared poorly compared with their past results. Why aren’t the lower pricing tiers working?

We see a number of complaints about customer service from both Cricket and Metro in the user review sections of our featured provider reviews. Perhaps instead of lowering prices, both companies could invest that money into customer service, providing a better experience for their subscribers. Again, I have no idea if this is causal in the poor third quarters for the company, but since they didn’t meet expectations even with price decreases, it’s certainly something to explore.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

New plans don’t lead to more subscribers for Metro, Leap

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

New plans don’t lead to more subscribers for Metro, Leap

Small businesses taking advantage of prepaid wireless

Joe — Wed, 04 Nov 2009 15:00:30 +0000

Prepaid wireless covers about 17 percent of U.S. wireless subscribers, and that number continues to grow. Carriers are adding more prepaid customers than ever, and unlimited services like Boost Mobile and MetroPCS are giving customers robust service plans for a fraction of what they’d pay for similar plans on contracts. Consumers will continue to help prepaid grow, but a new development could take it even further. A recent survey by Compass Intelligence suggest that more small businesses could use prepaid wireless services for employee usage.

The survey put the number at 22 percent of small businesses, defined as those with between five and 99 employees. That’s a decent number, and should lead to yet further growth of prepaid relative to postpaid.

Why would businesses choose prepaid plans when there are more full-featured postpaid plans out there — even ones designed specifically for businesses? Compass Intelligence chief strategist Kneko Burney has an idea.

The shift toward prepaid suggests a desire for more flexible contract options, likely due to a lower tolerance for long-term risk, among mobile phone buyers. In this recession, flexibility may be becoming more important than long-term cost savings or top-end devices for some customers.

Even better for prepaid, the survey question was of whether these businesses plan to buy prepaid phones before the end of 2009. This could mean even larger growth waits in the future. Cell phone contracts make it tough for users to switch on a whim. Perhaps more businesses would have said yes if the question had included plans for 2010.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Small businesses taking advantage of prepaid wireless

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Small businesses taking advantage of prepaid wireless

Mobile advertising can work, but it’s no sure thing

Joe — Thu, 22 Oct 2009 12:30:16 +0000

I’ll admit, I was a bit duped by the headline on this GigaOm post. We know that the US prepaid wireless sector lags behind its UK counterpart, so any article that purports to show the differences will interest me. That’s not exactly the case here. Instead, the author, Colin Gibbs, examines O2’s Top Up Surprises campaign, which “rewards users with prizes as they renew their accounts and enables advertisers to interact with consumers.” It sounds like a great idea, as customers can win more than just free minutes. As we’ve seen in both the US and the UK, though, mobile advertising platforms can fail as quickly as they succeed.

A prime examples comes right from the UK. Blyk, an ad-supported free MVNO, started offering service in 2007, and by the next year had over 200,000 subscribers. That’s quite the success, and Blyk was not shy about it. They constantly touted their numbers and even tried to tell others how to do what they did. But then, not two years after launching, they discontinued service. Advertisers, once eager to serve ads to Blyk’s young customer base, found that it wasn’t working as well as expected.

Virgin Mobile USA presents another case against mobile advertising. They had a wildly popular mobile ad service, Sugar Mama, which rewarded customers with free minutes in exchange for viewing ads and filling out surveys. Yet Virgin ended Sugar Mama in July because of unpaid funds. It was a great idea in theory, but in practice it didn’t work.

Gibbs thinks that more prepaid carriers in America should try mobile advertising to attract more customers. The problem is finding a platform that works. Virgin is a warning to any US company that tries this, and a reminder that what works in the UK doesn’t necessarily work in the US. If prepaid carriers on this side of the Atlantic want to mimic O2’s Top Up Surprises, they’ll have to find a willing partner. As Virgin proved, that’s not so easy.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Mobile advertising can work, but it’s no sure thing

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Mobile advertising can work, but it’s no sure thing

Prepaid for enterprise customers?

Joe — Mon, 28 Sep 2009 15:00:03 +0000

We know that prepaid wireless can be a good choice for consumers. But what about small businesses? They are entities that could have trouble committing to two years of a cell phone contract, and the current state of the economy only amplifies that effect. Sarah Reedy at Telephony Online takes a look at the issue. Will businesses, not knowing if certain employees will be around for two years, opt to buy prepaid phones? They could, but more than likely it will lead to a change in postpaid business offerings. Business users project to hit 64.2 percent of the market by 2013, up from 54.3 percent today, so expect carriers to further cater to them.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Prepaid for enterprise customers?

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Prepaid for enterprise customers?

Prepaid growing, but still not big money maker for carriers

Joe — Tue, 18 Aug 2009 12:34:24 +0000

As we’ve learned over the course of 2009, prepaid wireless is poised to grow faster than its postpaid counterpart. This is for a number of reasons, not least of which is the economic climate. Specifically, analysts forecast that prepaid will grow at 11 percent per year through 2013, while postpaid will grow about 4 percent per year in the same span. Yet because of the financial realities of prepaid customers, from a carrier’s perspective, we might not see much emphasis placed on prepaid — at least not as much as we’ve seen in other countries, where the majority of users are on prepaid plans. Matt Hamblen at Computer World takes a look.

The two biggest obstacles for widespread prepaid adoption in the US are ARPU and churn. ARPU, average revenue per user, is a big stat among US wireless carriers. When they get a postpaid customer to sign up, the ARPU is at $40 minimum, since that’s the cheapest plan with most major providers. Prepaid ARPU, at its best, tends to be about half that.

As far as churn, it’s expected to be markedly higher in prepaid. There’s only so much room for churn when customers are on a two-year contract, so carriers naturally want these committed customers on their ledger. They bring in more money, and it’s guaranteed money. Carriers like Verizon Wireless and AT&T normally post churn rates between one and two percent, while prepaid carriers like MetroPCS and Cricket wireless tend to be in the 4 to 5 percent range.

The question we’ve been asking is of whether prepaid will continue to grow at this rate even if the economy recovers. Hamblen has some quotes on the matter, both from the optimistic and skeptical side. The optimists, of course, are the players in prepaid, like Virgin Mobile CEO Dan Schulman. The skeptics tend to be analysts who look at the issue from the perspective of bigger carriers. With innovation focused on the postpaid sector, it’s hard to disagree with the skeptics.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Prepaid growing, but still not big money maker for carriers

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Prepaid growing, but still not big money maker for carriers

J.D. Power rates Net10 highest, notes prepaid savings

Joe — Mon, 03 Aug 2009 12:33:48 +0000

J.D. Power and Associates, the company which rates other companies, has released a new survey regarding the prepaid wireless industry. As always, they rate these services based on six factors which they think most important to wireless consumer satisfaction (performance and reliability, cost of service, account management, initial activation, offerings and promotions, and customer service). Topping this list this year was Net10, which was included in the survey for the first time. Quite a strong debut indeed. They put up a score of 774 out of 1,000. Ranking two through six, in order, were Tracfone, Boost Mobile, Virgin Mobile, Alltel, and T-Mobile. All of these ranked above industry average, while the others were apparently left in the dust. The survey also had some findings about prepaid in general.

Unlimited plans have done much to shift the usage of prepaid. While last year 70 percent of users were pay-as-you-go, rather than monthly plan users, that was down to 60 percent this year. Unlimited plans have moved customers to the monthly plan, something prepaid carriers surely value, considering the high level of churn they experience with pay-as-you-go users. Still, pay-as-you-go users seem to have a slightly higher level of satisfaction with their services.

This is reflected in the minutes used. While pay-as-you-go users average 145 minutes per month, monthly users consume an average of 573 minutes per month, mostly owed to unlimited plans.

Still think going to prepaid can’t save you money? An average contract user pays $81 per month for service. The average monthly prepaid user spends $56 per month, while the average pay-as-you-go user spends just $35 per month.

Also note that one area where people complain most about most prepaid services, but specifically Net10 and Tracfone, is customer service. This is weighted the least among J.D. Powers’s criteria. Perhaps if they put more of an emphasis on customer service, different services would rise to the top.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

J.D. Power rates Net10 highest, notes prepaid savings

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

J.D. Power rates Net10 highest, notes prepaid savings

Why there might not be a price war in prepaid unlimited

Joe — Fri, 10 Jul 2009 12:30:37 +0000

The phrase “price war” has been bandied about for the past week or so, on the heel’s of the new unlimited voice and text plan from Straight Talk. We even saw that affect the stocks of a few prepaid carriers earlier in the week, though the market appears to have corrected itself. There might not be a price war after all. In fact, according to Sue Marek of FierceWireless, it’s not very likely. In a well-reasoned and sourced post, Marek takes down the claims which struck fear in the hearts of carriers earlier in the week.

While she makes a number of points, including the margins for wireless resellers like Tracfone, parent company of Straight Talk, she really hits it on the head when it comes to marketing costs. She has a quote from Ken Hyers, senior analyst with Technology Business Research: “If marketing is a huge segment of your cost, you can’t keep going lower in price and still advertise.” That should affect Boost Mobile, MetroPCS, and Cricket, all of which advertise rather aggressively, more than Tracfone, which uses its Wal-Mart distribution as its main marketing ploy.

Then again, Tracfone is at a disadvantage when it comes to billing and customer service. They need their own call centers and billing systems, while Boost can rely on its parent company, Sprint. In fact, because. This may actually hurt Metro and Cricket a bit more, since they need their own systems, customer service reps, and marketing budget, while Tracfone and Boost are propped up in one area.

Again, the market seems to have corrected itself, and things are moving back to normal. We’ll see in six months, when Verizon will reevaluate the Straight Talk deal, what long-term effects this will have on the industry.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Why there might not be a price war in prepaid unlimited

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Why there might not be a price war in prepaid unlimited

Ready Mobile introduces new brand of unlimited plans

Joe — Wed, 08 Jul 2009 12:30:57 +0000

It really is an unlimited plan kind of week. On Monday we heard of a $45 unlimited plan from Straight Talk and a $50 unlimited plan from kajeet. The newest offer comes from Ready Mobile, though it’s not exactly like the normal brand of unlimited plans we’ve seen from many carriers. Instead it works on a three-day or seven-day basis. Plan details after the jump.

There are two tiers of service: three days and seven days. The three-day plan has unlimited voice minutes and 40 text messages for $9.99. The seven-day plan has unlimited voice minutes plus 100 text messages for $14.99. This works great for heavy weekend talkers, who can activate a $10 card on Friday and then use Ready Mobile’s other, lesser offerings to carry them through the week.

Fred Haumesser, VP of Sales for Ready Wireless, put it best. “Many of our customers really want to be able to buy unlimited services, but for many customers it’s difficult to commit to an entire month at any given time.” One advantage we’ve always touted about prepaid is the lack of commitment. This new plan brings that idea to a new level.

You can check out the new unlimited plans at Ready’s website. Phones and cards should be available at Stripes and Town and Country stores this summer.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Ready Mobile introduces new brand of unlimited plans

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Ready Mobile introduces new brand of unlimited plans

Zer01 not quite available yet

Joe — Tue, 07 Jul 2009 15:04:31 +0000

Toward the end of June we saw a marketing push for Zer01, a carrier boasting unlimited voice, text, and data — including smartphone data — for $80 per month with no commitment. If it sounds too good to be true, well, for now it is. Despite a PC Magazine article from March implying that Zer01 is an MVNO of the AT&T network. While Zer01 will use the AT&T network in some fashion, it appears they won’t technically be an MVNO. They still don’t have distribution, so you can’t yet take advantage of their service.

Technically, as they state on their website, Zero01 is an MVNE, which provides service to MVNOs. There’s a sign-up form, and there are whispers that they’re going to announce distributors in the near future, but nothing has popped up yet. So we will continue to wait for this “revolutionary” service to make its way to the public sphere.

I think it’s eminently reasonable to remain skeptical at this point.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Zer01 not quite available yet

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Zer01 not quite available yet

Quick hits: Cricket, Zer01, O2

Joe — Thu, 02 Jul 2009 12:30:39 +0000

Just a few notes before we head into the July Fourth weekend:

Zer01 is officially open for business. We talked about Zer01 last week in anticipation of their launch. There’s a huge marketing blitz, including the misconception that they’re somehow going to provide “5G” speeds over AT&T’s data network. If anyone plans to sign up for this plan, please hit me — editor at prepaidreviews — and let me know how it goes.

Cricket has launched a Spanish language website, appropriately titled MiCricket.com. Hats off to them, as this is more of a current customer move than one to pull in additional ones. While Hispanic customers account for on average 11 percent of a wireless carrier’s subscribers, Cricket is at about 33 percent. Kudos to them for serving their current customers. So many carriers ignore them and focus on obtaining new ones.

Finally, O2 Wireless has announced a partnership with Airport Wireless. O2’s SIM cards will be available to anyone with a GSM handset. This is most attractive for people visiting the U.S., since they can continue using their existing phones.

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Quick hits: Cricket, Zer01, O2

This post originated at PrepaidReviews.com - The number one resource for NET 10 Prepaid information on the web!

Quick hits: Cricket, Zer01, O2