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

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.