AT&T on Friday announced it will lift its artificial, 8Mbit/s speed limit on some of its roughly 12.4 million Cricket-branded prepaid customers. The operator also said it will offer 5G across all of its Cricket pricing plans, not just its most expensive ones.
The announcement comes as T-Mobile and Verizon both work to improve their own prepaid offerings. And that's noteworthy considering a wide range of other companies – from Dish Network to EarthLink – are also playing in the space.
Broadly, the US prepaid space has long trailed the postpaid wireless industry. That's because profit margins in prepaid are relatively narrow compared with postpaid plans that are often more expensive.
Moreover, the postpaid sector appears to be growing by leaps and bounds in 2021. That's a bit of a surprise to some who had predicted last year that the COVID-19 pandemic would drive more customers to cheaper mobile service plans, amid a potential economic slowdown. That clearly hasn't happened though, likely due to the fact that the US economy has been heating up as the pandemic recedes.
Jockeying for position
For AT&T though, the operator used its new Cricket announcement to boast of its overall success in the prepaid market. "We are proud of our subscriber growth and remain committed to earning the loyalty of our customers every day," John Dwyer, president of AT&T's Cricket Wireless prepaid brand, said in a release.
The company disclosed that it counts a total of 19 million prepaid customers, with 12.4 million of those subscribing to its Cricket brand. In comparison, T-Mobile US counts around 21 million total prepaid customers while Verizon counts just 4 million.
AT&T's prepaid announcement comes a few months after T-Mobile fired a major attack into the industry by offering unlimited 5G prepaid services for $25 per month for one line of service – far below what most other prepaid providers charge. Today, though, most providers have responded with multiline discounts that bring the cost of prepaid family plans down to around $25 per month for three or four lines of service.
Verizon has largely remained outside of the prepaid space. But the operator expects that to change in the coming weeks if regulators approve its pending purchase of TracFone, a massive prepaid provider in the US that's owned by América Móvil. During its most recent quarterly conference call, Verizon executives reiterated their hopes that the proposed transaction will close by the end of this year. They also said that they don't expect to make many changes to TracFone's basic retail strategy, which stretches across a variety of brands from Net 10 to Straight Talk.
"They are so good on prepaid, and they've shown that," Verizon CEO Hans Vestberg said of TracFone, which counts around 20 million prepaid customers in the US. He said Verizon will support the TracFone business with its customer care services and other back-end offerings. "But clearly, we want to keep the point of sales."
Meantime, other companies continue to work to flesh out their own prepaid strategies. Dish, for example, entered the prepaid industry with the purchase of around 9 million Boost Mobile customers last year. Since then, the operator has been fleshing out a prepaid effort that stretches from healthcare services to sports betting.
But there are also a number of other, smaller prepaid providers in the US, ranging from Consumer Cellular to Google Fi. The latest entrant into this sector is EarthLink Mobile, a new MVNO service running on T-Mobile's network from the longtime Internet service provider. As noted by PCMag, this is the third time EarthLink has offered some type of mobile service. However, the latest iteration of EarthLink Mobile is offering relatively standard pricing options.
- T-Mobile, AT&T push 5G into prepaid, but Verizon holds back
- T-Mobile thumbs nose at Dish with new prepaid promotion
- How and why Verizon acquired TracFone