Light Reading
With AT&T closing its Leap acquisition and Sprint introducing a new prepaid brand, contract-free service is once again becoming the biggest battleground in wireless.

The Re-Resurgence of the Prepaid Wars

Sarah Reedy
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
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 Light Reedy
Vodafone's Dr. Alan Law talks to Light Reading about virtualization, backhaul, SON and more after being appointed chairman of the Small Cell Forum.
Wireless operators are jumping on the mobile music bandwagon, a move that sounds good for many reasons.
The worlds of tennis, fashion and wearables collide as Ralph Lauren and OMsignal turn a polo into a sensor to track your every movement.
The fine print on Sprint's new $60 plan suggests it can prioritize other plans' traffic first – a letdown, and maybe even a net neutrality violation.
Verizon is reportedly working with an industry consortium to launch its own app store, but past efforts suggest it's not a smart move for the operator.
Flash Poll
LRTV Huawei Video Resource Center
Sales Director of INIT on Plug & Play Switch Devices

9|19|14   |   3:21   |   (0) comments


INIT Italy uses both the Huawei S5700 and S7700 series switches for the campus LAN environment. Sales Director Andrea Curti says their company chose these Huawei devices over others because of their performance, flexible scalability and plug-and-play features.
LRTV Huawei Video Resource Center
Saudi Arabia Upgrades Vocational Training System

9|19|14   |   3:31   |   (0) comments


The Technical and Vocational Training Corporation (TVTC) has 100,000 students, 150 government-owned institutions and oversees 1000 private institutes. The CIO of TVTC explains that Huawei devices have allowed them to manage multiple datacenters using just one software program, scientifically tracking the progress of students and teachers, saving them millions.
LRTV Huawei Video Resource Center
Huawei's Media Solutions Are Here to Stay

9|19|14   |   4:35   |   (0) comments


The current media revolution requires rapid upgrades in technology. New formats (HD, 3D, 4K etc.) and the subsequent explosion of file sizes demand sophisticated network and storage architecture. Social media and the multiple distribution channels require a robust asset management system. Gartner analyst Venecia Liu speaks about the current technological trends in ...
LRTV Huawei Video Resource Center
Microgenesis on Huawei's Switches

9|19|14   |   3:57   |   (0) comments


Microgenesis is a solutions and system integrator company in the Philippines whose areas of expertise include data centers, networking and security products. In this video, Executive Director Jeffrey Choa talks to us about his customers needs and they benefit from using Huawei switches.
LRTV Huawei Video Resource Center
Network Solutions Help the Philippines Jump Ahead

9|17|14   |   2:59   |   (0) comments


In the past, the Philippines has under-invested in technology. Now, the CEO of Softshell talks about how Huawei products help the Philippines jump ahead as the economy improves.
LRTV Huawei Video Resource Center
VCS Observation for Safer Cities in the Netherlands

9|17|14   |   5:20   |   (0) comments


Holland's VCS Observation has been operating for 22 years. Its main goal is to get cities safer. CEO Wim van Deijzen tells us some of the challenges his company faces and how Huawei is helping to overcome these challenges.
LRTV Huawei Video Resource Center
A Conversation With Serbia's Ministry of Interior

9|17|14   |   4:38   |   (0) comments


At HCC 2014, the Assistant Minister of the Ministry of Interior of the Republic of Serbia talks to us about his projects and corporation with Huawei. Solutions like Safe City and E-Government and services like cloud computing are just some of the areas his department is interested in.
LRTV Huawei Video Resource Center
IHS Analyst Discusses eLTE at CCW 2014

9|10|14   |   7:09   |   (0) comments


Thomas Lynch, associate director of critical communications at IHS Technology, talks about broadband in critical communications.
LRTV Huawei Video Resource Center
TCAA on Huawei eLTE: A Broadband Solution for Mission-Critical Communications

9|10|14   |   2:29   |   (0) comments


At CCW2014 in Singapore, the TCCA's Phil Kidner talks about the importance of broadband data for critical communications.
LRTV Custom TV
Spotlight on Cisco: SDN for Optical Networks

9|8|14   |   9:27   |   (0) comments


Cisco's Greg Nehib talks OpenFlow and more on the 'Software-Defined Networking for Optical Networks' panel at the Big Telecom Event in June 2014.
LRTV Custom TV
Cisco's Evolved Programmable Network (EPN)

9|8|14   |   4:05   |   (0) comments


A look at the various demos Cisco showed at Light Reading's Big Telecom Event highlighting Cisco's EPN innovation and how SDN and NFV technologies are enabling a variety of new services.
LRTV Huawei Video Resource Center
The Future of Ultra-Broadband, With Kevin Kelly (UBBF2014)

9|5|14   |   1:13   |   (1) comment


If you think the technological changes we've seen up to now are astounding, just wait until you see what the future has in store. Discuss upcoming breakthroughs with Kevin Kelly, Founding Executive Editor of Wired Magazine, at the Huawei Ultra-Broadband Forum on September 24.
Upcoming Live Events!!
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
Today's Cartoon
Vacation Special Caption Competition Click Here
Latest Comment
Hot Topics
AT&T: We'll Bundle Fixed Wireless & DirecTV
Mari Silbey, Independent Technology Editor, 9/15/2014
New NFV Forum Focused on Interoperability
Carol Wilson, Editor-at-large, 9/16/2014
NFV & The Data Center: Top 10 Takeaways
Sarah Reedy, Senior Editor, 9/18/2014
Connecticut Cities Crowdsource Gigabit Nets
Jason Meyers, Senior Editor, Utility Communications/IoT, 9/15/2014
Pics: LR's Women in Telecom Breakfast
Sarah Reedy, Senior Editor, 9/16/2014
Like Us on Facebook
Twitter Feed