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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.

6 Responses

  1. Peter Kent Says

    Another advantage that Metro and Cricket lost in their new aggressive growth AWS only markets is the ability to flash phones from other carriers. This differentiator , combined with low unlimited pricing gave them a strong one two punch. Now they are trying to compete on price alone and that just does not cut it anymore. People EXPECT low prices, they are saying…What else you got? And without flashing as their other followup, Cricket/Metro really have little to offer at this point.

    And yeah, CS makes a HUGE diff. Page Plus , which once had fairly good customer service is in the toilet in my book, no better then Tracfone/Virgin Mobile. Tmobile also outsourced all their prepaid/Flexpay cs to overseas and it is in the commode also.

    CS is a huge differentiator now.
    Imho, Verizon prepaid and Att gophone currently have the best.

    Cricket and Metro WILL merge. It is inevitable, unless they turn their numbers around or allow unlimited free roaming so that phones flashed from their previous non AWS markets can work in the AWS markets. Then if they allow flashing in their AWS markets, they will gain that edge back. Without it, they are just another pair of low cost carriers with nothing special.

    Posted on November 12th, 2009 at 5:58 am
  2. DollyRoberts Says

    I feel for them, it’s got to be hard when companies are fighting to stay alive but from a consumers perspective their fight is a good thing and keeps prices low. I bought the Straight Talk phone which I think is the leader in the unlimited offers because it’s running on Verizon’s network nationwide which most of the others are not, nationwide I mean.

    Posted on November 13th, 2009 at 7:23 am
  3. Chase Winters Says

    I have Straight Talk too and my family and friends are seeing what I have and thinking seriously about ditching their plans because it runs on Verizon.

    They’ve had terrible experiences with T-Mob and Metro. Me too.

    I’m very happy with Straight Talk and am impressed with their coverage on Verizon.

    To me, the $30 – 1,000 minutes, 1,000 texts deal is unbeatable. I travel and have never had a problem.

    When I had Metro POS, it worked fine in town but as soon as I got outside the city, fuhgeddaboutit!

    You get what you pay for, or in the case of Straight Talk, MORE than you pay for!

    Posted on November 21st, 2009 at 6:25 pm
  4. Jollybird Says

    Chase, I have Straigh Talk too, but the $45 plan. Thugh the $30 one is not a bad deal, this newer plan is by far the best prepaid. It gets you unlimited calls, unlimited text, unlimited web mobile access and loads of data for just the $45 / month. And you’re right, the fact the it carries Verizon makes it the perfect cell phone. Unlike Met or Boost, I never, ever get dropped calls or out of range – awesome in my case since I’m always on the road w/ my kids. I’m sure WalMart will be selling these plans like hotcakes this holiday season – Definitely the best bank for you buck!

    Posted on November 26th, 2009 at 11:33 am
  5. Mike Freeman Says

    To Chase Winters: The Straight Talk $30 plan has been beaten. Page Plus offers a 29.95 plan with 1200 minutes/1200mms/texts /50 megs with no tax. ST still has a better no limit plan though then Page Plus .But Page Plus allows most any Verizon phone (with limitations). ST is stuck with only ST phones.

    Posted on November 26th, 2009 at 7:48 pm
  6. Alina Says

    I narrowed down my choices to StraightTalk and Boost and I’m so glad I went with StraightTalk. My aunt bought a boost and she has had sooo many dropped calls that she is seriously considering crossing over!

    Posted on November 28th, 2009 at 2:32 pm

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