Leap Revamps Prepaid With Tiered Data

Leap Wireless International Inc. (Nasdaq: LEAP)-owned Cricket Communications Inc. today unveiled new tiered data pricing plans to complement an expanded smartphone lineup, as well as outlining its plans to conquer the prepaid market with a national 3G network and eventual move to 4G.

The new "all-in" monthly prepaid plans range from $35 for talk and text only, to $60 for 7.5 gigabytes of data, plus unlimited nationwide talk and text. Stealing a page from Boost Mobile 's playbook, they will also include all telecom taxes, regulatory fees, and other taxes, but won't include an activation fee. This means lower costs for its customers and, it hopes, better margins and less churn for Cricket.

Previously the carrier offered a 5GB plan for $40 per month.

Cricket made the announcements at its analyst day Tuesday ahead of its second-quarter earnings. Chief operating officer Al Moschner said the Cricket smartphone plans will sell for more than 50 percent less than comparable postpaid options.

Specifically, he was referring to Cricket's $55 Android plan, which, he says, is approximately half the monthly cost charged by larger US carriers "for the same high-speed 3G access and great features."

"It will be our largest change in our history, and it's a change that will be a major contributor and benefactor as the industry moves more into prepaid," Moschner said. Cricket's move into tiered data pricing follows AT&T Inc. (NYSE: T)'s new plans, another trend the industry is expected to follow.

Notably, unlike AT&T, Cricket won't charge for overages. Instead it will slow that user's connection speed down from its advertised maximum of 1.4 Mbit/s, but didn’t say how low it will go. It is also no longer offering its first-month-free service promotion and increased the price of its voice and text plans by $5.

Cricket gets smart
Amongst the new handsets Cricket plans to introduce will be the BlackBerry Curve 8530 for $299, Sanyo Electric Co. Ltd. (Nasdaq: SANYY) Zio, and Samsung Corp. Messenger Touch. There will be 15 devices in total introduced between now and the end of the year, according to Moschner. The focus for all of them will be advanced smartphone features at prepaid prices. (See Android Gets a Prepaid Boost.)

Moschner said that smartphone prices, including those for Android, will come down to the mid-$100 range, with tablets in the neighborhood of $200 before the end of the year. Cricket plans to nab as many as it can.

"We believe these new devices, when coupled with the right rate plan, will clearly contribute to a higher APRU future," added Doug Hutcheson, Leap's president and CEO. Leap had previously been too focused on entry-level devices, he admitted.

Cricket becomes MVNO for Sprint
Cricket also announced today that it has formed a wholesale MVNO agreement with Sprint Corp. (NYSE: S) to offer its products and services over Sprint's 3G network throughout the US, putting it on similar footing as Virgin Mobile USA Inc. (NYSE: VM).Both Hutcheson and Moschner touted the growth of Cricket's once-regional network, saying it is using this new partnership to get a national 3G data footprint.

At the same time, it is also testing Long Term Evolution (LTE) in San Diego with Huawei Technologies Co. Ltd. and is planning deployments in the next three to four years. Hutcheson said Leap will evolve into 4G either with its own internal capabilities or with potential partners, presumably like fellow prepaid provider MetroPCS Inc. (NYSE: PCS). (See LTE Watch: Verizon Pushes Ahead With Rural Plans.)

"If prepaid is driving ahead and devices are shifting towards a data-centric world, having data-capable networks is paramount and having them today matters," Hutcheson said. "We believe having full 3G capability and over time 4G technologies will be needed."

According to the company, Cricket currently covers approximately 92 million POPs. The prepaid carrier will report its second-quarter earnings today after market close.

— Sarah Reedy, Senior Reporter, Light Reading Mobile