Cricket, Metro need each other now

It’s not surprise that I’m talking about Cricket and Metro again today. After all, until this week they, along with Boost, were the only names in flat-rate, unlimited calling. But now three of the top four major carriers have announced $99 unlimited plans, and Boost’s parent company, Sprint, looks to be rolling out their own unlimited plan, though theirs might be 40 percent cheaper. So what can Metro and Cricket do to stave off this intense competition?

If you didn’t think the word “merge” would be included in this paragraph, you haven’t been paying attention. Analysts have long been talking about such a merger. Metro even took steps to make it a reality back in September, but Leap thought better of it. And it was probably a good idea, since they had that whole misreporting debacle — though they did clear it up and have thrived since.

See, the major carriers are offering their service at a far more expensive price point than Metro and Cricket offer the same service. The carriers can do this because they have nationwide networks, while Cricket and Metro are stuck with smaller, regional brands. This hurts them in two ways.

First, they have to create agreements with other companies for roaming. Even with the deals, roaming costs more than 50 cents a minute on Cricket and Metro, so they’re not really appealing to people who move around a lot.

Second, they’re not available in all markets. Only the ones where they have towers. So only a select number of people can use these two services, and even then they’re restricted as to where they can use it. This does not bode well for either of them.

A merger would change that, though. They could combine networks, which incidentally do not overlap in many areas. This wouldn’t create full national coverage, but it would be a good start. If they could keep their $50 price tag on a reasonable unlimited plan, it would go a long way to compete with the majors.

Ah, but we still have the 700 MHz auction, the results of which we haven’t yet seen. The auction itself has actually precluded any further merger talks between the companies, thanks to the FCC’s collusion rules. So the major carriers made a good strategic move by announcing unlimited plans now, while Metro and Leap are tied up and can’t do a damn thing about it.

Yet, both companies are likely to come away with a decent slice of the spectrum — unless AT&T flexed it’s muscles and just bought the whole damn thing. But in any case, with their combined networks, and their combined 700 MHz bounty, they could create a viable, national prepaid entity.

These are just some basic thoughts on the situation, but from a pedestrian standpoint, it makes a degree of sense. Of course, the story might be a bit different if I was to step into the board room of each company. But in any event, it’s something they should both ponder, because without each other, they might die out individually.

Related Posts

One Response

1. U.S. Cellular hops on unlimited bandwagon | Prepaid Reviews Says
   

   [...] — though that is denied by the company (did you expect anything else?). So we’ve heard Cricket and MetroPCS mentioned a lot this week. Now another prepaid carrier is coming to the party: U.S. Cellular. They’ll soon [...]

   
   Posted on February 22nd, 2008 at 8:31 am

Leave a Reply