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 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
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
Project Ara – smartphones built around modules – will be launching soon, creating questions about how operators will price such devices as leasing programs have become the norm.
The past year validated our 2014 small cell movers and shakers list in a lot of ways, but it also saw several executives leave the small cell market, by choice or otherwise.
BlackBerry and T-Mobile are considering kissing and making up, but only if their CEOs can get along.
Sprint's promotion to halve the service pricing plans of those switching from AT&T or Verizon isn't as good as it seems when you factor in the new device requirements.
OTT chat app Kik has raised $38.3M in funding and acquired a GIF maker, showing operators there are other ways to monetize chat than ads and fees.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Dr. Dong Sun Talks About Carriers' Digital Transformation & Huawei’s Telco OS

1|29|15   |   6:28   |   (0) comments


Dr. Dong Sun, Chief Architect of Digital Transformation Solutions at Huawei, discusses how telecom operators can become digital ecosystem enablers and deliver optimal user experiences that are in real-time, on-demand, all-online, DIY and social (ROADS).
LRTV Huawei Video Resource Center
Huawei's Chief Network Architect Talks about Network Experience & Operators’ Strategies

1|29|15   |   3:39   |   (0) comments


In the digital age, network experience has become the primary productivity especially for telecom operators. In this video, Wenshuan Dang, Huawei’s Chief Network Architect, discusses how carriers can tackle the challenge of infrastructure complexity in order to enhance business agility and improve user experience.
LRTV Documentaries
The Rise of Virtual CPE

1|27|15   |   01:38   |   (3) comments


As NFV strategies evolve from tests and trials to production telco networks, expect to hear a lot about virtual CPE (customer premises equipment) rollouts during 2015.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Heavy Reading's Graham Finnie about the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control – and sign up for
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
Google Continues Gigabit Expansion
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/27/2015
BlackBerry Wants Net Neutrality Protection – That's Just Sad
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/22/2015
Verizon Ready for Google MVNO Challenge
Dan Jones, Mobile Editor, 1/22/2015
FiOS Picks Up Pace Again
Alan Breznick, Cable/Video Practice Leader, 1/22/2015
Cablevision's New WiFi Try – Freewheeling Enough?
Mari Silbey, Independent Technology Editor, 1/26/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Weekly Executive Interview
Join us live for Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, Universal, Intel and Microsoft, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he has to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.