& cplSiteName &

The Re-Resurgence of the Prepaid Wars

Sarah Thomas
3/14/2014
50%
50%

US wireless operators run hot and cold on how interested they are in the cash-conscious consumers of the prepaid market. But prepaid is hot now.

AT&T Inc. (NYSE: T) closed its acquisition of Leap Wireless International Inc. (Nasdaq: LEAP) Friday, less than 24 hours after receiving approval from the Federal Communications Commission (FCC) . Shortly thereafter, Sprint Corp. (NYSE: S) announced an entirely new prepaid brand, the aptly named Sprint Prepaid, to sit alongside its Boost Mobile and Virgin Mobile USA Inc. (NYSE: VM) brands. (See Sprint Segments Its Prepaid Subscribers and Sprint Revamps Prepaid Offers.)

The timing might have been a coincidence, but the message is clear: Prepaid is still (or again?) an important battleground for wireless operators. T-Mobile US Inc. has successfully made waves, and AT&T and Sprint plan to respond accordingly. (Verizon Wireless , for its part, is holding strong and maintaining its "meh" approach to prepaid.) (See T-Mobile Leads, Sprint Suffers in Pricing Wars and Verizon's 4G Strength Keeps It Above the Fray.)

AT&T has promised to unveil "the new Cricket" in the coming weeks, promising to "shake up the no-contract segment with a combination of simple, low-cost rate plans; a terrific lineup of smartphones; and a great network experience." (See AT&T Plans a Prepaid Cricket Attack and AT&T's Device Mix Shifts Away From Postpaid.)

Sprint says its new prepaid brand is designed for those customers that don't want a contract, but also don't want to leave the comfort of a big brand. It offers two options and, interestingly, one doesn't even include wireless data, but relies on WiFi, which would seem to put it in competition with some of its MNVOs like Republic Wireless and Scratch Wireless. (See Why WiFi-First Works for Wireless.)

Sprint Prepaid customers can choose between a $45 monthly plan for unlimited talk and text messages, and WiFi-only data, or a $60 plan with unlimited talk and text, and 2.5GB of high-speed data that can be slowed to 3G for video streaming. They can choose between the Spark-enabled Samsung Galaxy S4 Mini, LTE Galaxy 3, or 3G Moto G, or a pre-owned iPhone 4S. (See Sprint Sparks to Reduce Churn, Save Unlimited.)

Prepaid and contract plans run on the same networks, and the prepaid offerings are improving, so you have to wonder if more consumers will see the writing on the wall and ditch their expensive contracted plan for a no-contract offer. It's typically the paltry data offerings or out-of-date handset selection that stops them, but the market will continue to look more attractive the more attention operators pay to it.

If AT&T makes good on its promises with Leap and T-Mobile continues its path of carrier pricing destruction, today's moves might just be the first of many that make contract-free look all the more appealing.

— Sarah Reedy, Senior Editor, Light Reading

(37)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 4   >   >>
SachinEE
50%
50%
SachinEE,
User Rank: Light Sabre
3/27/2014 | 6:35:04 AM
Re : The Re-Resurgence of the Prepaid Wars
@ Liz Greenberg, this is a very good analysis I must say. I also wish that's not true but that seems most likely the case as you have put it quite logically. These carriers will never lose the money. They will make it work for them one way or the other. The shift from CDMA to GSM will produce a lot of confusion among the consumers and carrier will come out the ultimate winner.
SachinEE
50%
50%
SachinEE,
User Rank: Light Sabre
3/25/2014 | 6:55:23 AM
Re : The Re-Resurgence of the Prepaid Wars
@ jabailo, that is the point actually. You have to let go of streaming. That's what these plans are intended for. These seem to be intended for people who use their mobile phones mainly for voice and text and may be keeping presence on social media. The people who use computers and tablets for heavy data use and cell phones for keeping their online presence would like these plans.
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
3/22/2014 | 4:51:20 PM
Re: Cheap phones
How about satellite Internet for trains?

I've been looking at rural properties such as cabins that are close to off grid, and when I look for Internet providers several satellite ISPs are coming up!

My recollection of satellite internet was Iridium.  The Boeing-McCaw venture back in the 1990s.   They had planned to launch 220 LEOs...Low Earth Orbit Satellites, but I don't think they ever got that many birds in the sky and it eventually got sold off.

Rip Van Winkling to a decade or so hence, suddenly I see a lot of satellite providers offering service at very low rates ($30/mo).   I will have to dig around since their appearance has blindsided me somewhat.   I've been told that the basic problems is the speed of light.  

If you go with geosynchonous satellites, that's 22,300 miles back and forth added to your internet traffic.   The LEO system would have put them very close to the Earth, 200-500 miles or about 2-3x the orbit of the Shuttle or ISS (110 miles), but that means the have to move in relation to the surface.  Which means you need a lot of them to cover he planet.  Not sure which system the current group uses.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/21/2014 | 5:48:06 PM
Re: Cheap phones
Fiber along the rail with the signal transmitted up through the wheels?
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
3/20/2014 | 10:13:51 PM
Re: Cheap phones
Can you imagine the bandwidth that something the size of a rail should provide!

Another option...fiber optic cable with the repeaters you describe.

Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/20/2014 | 7:00:14 PM
Re: Cheap phones
I can think of a couple of options here to improve service. One would be to install small cells alongside the track, connecting to a small cell or microcell inside the train which would convert the signal from LTE to Wi-Fi.

I also wonder whether would be possible to actually run a data signal through the track itself, and then up through the wheels of the train where the wheels touch the track.
Phil_Britt
50%
50%
Phil_Britt,
User Rank: Light Sabre
3/20/2014 | 4:40:39 PM
Playing catch-up
Prepaid is commonplace in many other areas of the globe, so the U.S. is just really catching up at this point. 

Prepaid is also catching on in financial services. Prepaid enables people who've gotten into credit issues before to better budget their finances. If they are using pre-paid, they can give themselves a hard limit on how much they spend monthly for telecom and data. 

Prepaid can help the company gain revenue more quickly, though the recognition of revenue earned gets more complex from an accounting standpoint.
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
3/20/2014 | 1:36:12 PM
Re: Cheap phones
When I took our commuter rail into Seattle every day, about a 20 mile ride, what I tried using my Wimax mobile option.  

I found that it would be ok standing still, but had trouble when the train was in motion.   LTE was not as prevalent at the time, but there were others who had USB modems from their cell companies.  My guess is those were 3G data connections, maybe 1.5Mbps.  I think their performance was better than mine, but that could be because there are more cell towers along the route and some dead zones for my Clear service (since the train runs along a fairly unpopulated freight corridor, mostly industrial and warehouses, and it was in a valley much of the way.

Could the Engine host an LTE/Wimax connection and link it up to a hub in the cars?  My guess is yes although these technologies must have a max bandwidth close to 6Mpbs and one channel isn't going to help a train full of Wifi connected people!  

So, ideally we'd each have our own LTE/Wimax connection and hopefully there are no dead zones along the way!  

My phone has LTE, and in my car, when I'm in the LTE zone (my neighborhood isn't fully converted yet) I am able to stream HQ music very well.  However, if I drive into the 3G zone, it stalls and skips and becomes nearly unuseable.

 

 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/19/2014 | 6:19:15 PM
Re: Cheap phones
Couldn't they just use LTE or some other wireless data to connect the rail car to the backhaul? Make the rail car into a sort of super-MiFi?
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
3/18/2014 | 9:43:02 PM
Re: Cheap phones
Not only have I not seen it work...I'm not really sure how it is supposed to work at all.

They put a Wifi hub on a train car, fine, but what does it then communicate with? Do they use the rail as a communications link?  If the engine in radio contract and they run it along some voice band?


Page 1 / 4   >   >>
More Blogs from Que Sera Sarah
This week in WiC: Bloomberg debates the merits of women's conferences; Europe's 1,000 woman boardlist goes live; Glassdoor outlines some unique job perks; and more.
Enterprises crawl, walk, run into the Industrial Internet of Things as US service providers look to secure their role in this market worth potentially trillions of dollars.
For our inaugural WiC weekly roundup: Facebook's leaders set good examples; the brogammer fashion debate; Intel's Africa outreach; and more.
Deloitte's survey of 7,700 Millennials suggests that their motivations and priorities are different from those of their older colleagues, as is their sense of loyalty to their employer.
Company increases its commitment to hiring and retaining more women and underrepresented minorities, as well as to improving the pipeline for the entire industry.
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Documentaries
All Change in Video

2|11|16   |   33:12   |   (0) comments


At this moderated panel at 2020 Vision in Dublin, Alan Breznick, Cable/Video Practice Leader of Light Reading, sits down with Jeff Finkelstein, director of network architecture at Cox Communications, to discuss the rapidly changing video market.
LRTV Custom TV
Hosting in Ireland, Past & Present

2|10|16   |   16:07   |   (0) comments


Garry Connolly, president of Host in Ireland, presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
Women in Comms Introduction Videos
What's Hot in Mobile Commerce?

2|10|16   |   12:18   |   (1) comment


Claire Maslen, financial services relationship manager at the GSMA, talks about the development of the digital commerce sector and the types of relationships that mobile operators are developing to further their m-commerce strategies.
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (1) comment


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
Cincinnati Bell Joins Weight Watchers Club
Alan Breznick, Cable/Video Practice Leader, 2/5/2016
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Animals with Phones
Retro Is the Way to Be Click Here
Some animals are too cute for smartphones.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.