Cricket not worried about reduced broadband subscribers

One interesting thing struck out about Cricket‘s quarterly results, which were released yesterday. While the company added a net 155,000 cell phone subscribers of its own volition — i.e., not part of the Pocket Communications acquisition — they actually lost 48,000 broadband subscribers. This comes not long after the company revamped broadband plans by introducing usage tiers. The idea, as CEO Doug Hutcheson tells it, was to let the broadband subscribers lag a bit. Mike Dano at FierceWireless has the story.

Cricket is actually fluctuating somewhere near its 3G capacity, and obviously as they add more customers, especially smartphone and broadband customers, they’re going to continue creeping towards that limit. That hurts, because broadband and smartphone users provide revenue for the company. But since the average broadband user consumes 2GB of data per month and the average smartphone users consumes just 680MB, the focus has shifted to smartphones. That part has worked well, as Cricket reports that 40 percent of its new customers end up with smartphones.

Still, this just helps manage growth. Cricket is still dealing with a capacity issue, and they’re eventually going to hit it. To remedy this, Cricket is planning two initiatives. The first is a commercial LTE network, scheduled for launch next year, at least in trial markets. The second is session-based data, a feature to be implemented later this year as well. Both of these could help Cricket better manage its data capacity.

Here’s Hutcheson on the issue:

It was our goal…to utilize more of our 3G network capacity; that was our intent. Our intent is to utilize as much of it as we can. The plan to do that is we will continue to let the broadband business tail off a bit. We’ll do that by pricing at this point and keep opening up room as we get closer to the line of capacity, we’ll open up room as required or as necessary for smartphones. I don’t think we’re going to be on that line by the end of first quarter. I certainly believe we will have advanced further down that and we will be taking steps to shape our business.

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3 Responses

1. Wopler Says
   

   Ishouldn’t imagine anybody in the prepaid market should really be worried at the moment. What with a reported 25% of all post paying clients making the switch this year. And if tracfone can add 1 million subscribers to their books in the last quarter, then obviously there’s a future other than flogging smarter phones.

   
   Posted on February 28th, 2011 at 9:33 am
2. MetroPCS seeking more spectrum | Prepaid Reviews Says
   

   [...] customers, it will have to find expansion wherever possible. As we learned in the case of Cricket, regional carriers will have capacity issues. To offset that, MetroPCS is seeking another $1.5 billion term loan that will help it buy more [...]

   
   Posted on March 4th, 2011 at 9:29 am
3. When will prepaid carriers offer tablets? | Prepaid Reviews Says
   

   [...] we learned earlier this year, Cricket is near its 3G capacity and has reacted by backing off its mobile broadband offering. This is also perhaps why [...]

   
   Posted on September 21st, 2011 at 2:41 pm

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