Cricket Communications is about to become the first operator in the country to offer a prepaid iPhone. The Leap Wireless International subsidiary announced today it would begin selling the iPhone 4S and the iPhone 4 on a no-contract basis starting June 22. We think this helps level the playing field with postpaid carriers on handsets, Leap President and CEO Doug Hutcheson said during a call with analysts.
The arrival of the iPhone at Cricket marks a major step forward in setting the company apart from the competition, he said. The iPhone 4S and the iPhone 4 will not be the last Apple devices to make their appearance at Cricket – Hutcheson said the company expects to offer new models when they become available." Customers will have to pay more up front for the hugely popular smartphone, as Cricket is only providing "modest subsidies" on the device. The iPhone 4S 16 GB model will retail for $500 and the iPhone 4 runs at $400. The device retails for between $100 and $200 at postpaid providers.
But Cricket is offering the iPhone with much lower monthly rates than postpaid plans. Its prepaid plan for the iPhone runs at just $55 for unlimited voice, text and data – though Cricket's fair usage policy caps out data access at 2.3 GB per month. Cricket's Muve Music service will not be offered on the device. Cricket is banking on its customers taking a long-term view of costs. Though its subscribers could pay less for the iPhone at a postpaid carrier, the contract they have to sign to get that low rate locks them into monthly service plans averaging around $100, which end up being more expensive over time. Cricket claims that the total cost of owning a prepaid iPhone on its network for two years the average term of a postpaid contract – is $1,719. The average cost of owning a postpaid iPhone on contract over the same period of time is $2,775, Cricket estimates. The $1,000 cost discrepancy will be Cricket's primary differentiator. Cricket airtime refills are available for all plans at http://www.prepaidonline.com.
In a tip sent to us by an anonymous Gamestop employee, the new prepaid mobile phone service details have been sent to participating stores. Here are the details. The new pre-paid mobile phone plans will allow pay as you service for existing phones to transfer their number, or to get a new phone and number. The plans run from $35 to $55 depending on the plan. No details have been officially announced from GameStop as (according to source) employees are just getting the information this week.
T-Mobile, Bloomberg reported, is in talks about merging with MetroPCS. While the need for new spectrum with which to build out LTE networks is a frequent motivator—such as it was during AT&T’s 2011 bid to purchase T-Mobile—the report statedthatT-Mobile, Bloomberg reported, is in talks about merging with MetroPCS. While the need for new spectrum with which to build out LTE networks is a frequent motivator—such as it was during AT&T’s 2011 bid to purchase T-Mobile—the report statedthat the combination of the nation’s fourth- and fifth-largest carriers was more about bolstering T-Mobile’s ability to grow.
T-Mobile’s postpaid struggles left the operator focusing on prepaid for the majority of future growth and competing more with MetroPCS, Leap Wireless and Tracfone,” Technology Business Research analyst Eric Costa wrote in May 10 research note. “This could lead to a potential alliance or merger between some of these players, including rumors that T-Mobile’s parent company, Deutsche Telekom, and MetroPCS are in talks about a possible sale of T-Mobile USA or a merger where DT will be in control of the new combined entity.” the combination of the nation’s fourth- and fifth-largest carriers was more about bolstering T-Mobile’s ability to grow.
AT&T was in serious talks to purchase Leap Wireless, a carrier with a prepaid base and a network that runs on incompatible technology, Reuters reported May 10, highlighting the challenge that players in this mature market face when it comes to growth. Bulking up seems to require some combination of an acquisition, a Long-Term Evolution (LTE) network and a solid base of pre-paid subscribers. Topups for both are available at www.prepaidonline.com.
Tracfone Wireless is acquiring Simple Mobile in a deal that could help it kick off a SIM-only service to the U.S. market.
Simple Mobile has more than 1 million customers and runs on a SIM-only model - it doesn't sell phones, but instead sells prepaid SIM cards that can be used to activate about 200 different GSM phones including the iPhone. It claims to be T-Mobile USA's largest MVNO. Tracfone, T-Mobile, Simple Mobile and many other carrier refills can be purchased online at www.prepaidonline.com.
America Movil, Tracfone's Mexico-based parent company, issued few details about the transaction in its announcement Thursday. It did not disclose how much it is paying for Simple Mobile, but said it expected the deal to close this quarter.
The acquisition is "likely the first step in a broadening strategy," BTIG Research Analyst Walter Piecyk said in a research note. "The move comes at an opportune time as unlimited pre-paid operators Leap Wireless and MetroPCS are struggling with the rapidly rising costs of smartphone subsidies and post-paid operators are cracking down on their previously liberal upgrade policies."
Piecyk pointed out that other CDMA prepaid providers like Cricket, MetroPCS, Boost Mobile and Virgin Mobile USA are precluded from competing with their own SIM-only service since CDMA phones doesn't use SIM cards.
H20 Wireless, an AT&T MVNO, also offers SIM-only service but its plans are less competitive than Simple Mobile's.
Tracone, a U.S. subsidiary of Mexico's America Movil, claims to be the largest prepaid provider in the country with 19.8 million subscribers. It sells prepaid wireless debit cards and low-cost handsets at gas stations, big box stores, pharmacies and other retailers.
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