In 2009, prepaid wireless changed the “wireless game”. $50 was the number every wireless carrier, large or small, was trying to reach. There were (and still are) plans offering Unlimited talk for $50, Unlimited Talk & Text for $50, Unlimited Talk, Text, & Web for $50, and everything in between. Carriers like Boost Mobile, Cricket, and MetroPCS led the charge, forcing smaller carriers and MVNO’s to come to the plate with better offerings. And everyone gave their response. Here’s a short list of the $50 players:
- Boost Mobile – Unlimited Talk, Text, Web
- Cricket – Unlimited Talk, Text, Web, and some Cricket specific features (*market dependent)
- MetroPCS – Unlimited Talk, Text, Web, Email, and more MetroPCS specific features (*market dependent)
- PlatinumTel – Unlimited Talk, Text, 100mb web
- Simple Mobile – Unlimited Talk, Text, 100mb web
And I’m sure there are many more that can fill this category.
However, as of late, there seems to be a shift in this price point. Carriers and MVNO’s are beginning to offer similar plans for only $40. This is a monkey wrench, if I ever saw one. Here are some examples:
- Airvoice Unlimited – Unlimited Talk & Text = $39.95
- Simple Mobile – Unlimited Talk & Text = $40
- PagePlus – Unlimited Talk & Text = $45 (includes 20mb of web, but used to be only $39.95)
- MetroPCS – Unlimited Talk, Text, and basic web = $40
- Cricket – Unlimited Talk, Text, and basic web = $40
- H2O Pure – Unlimited Talk & Text = $40
You get the picture. If there were a “Wireless Threat Advisory System”, it would be elevated to orange (high).
How are these carriers doing this? Don’t get me wrong, its always a great thing when you get more for less. I just wonder, at what cost. At these lower prices, what happens to these carriers’ margins? With a lower price point, and lower margins, can the carrier sustain the same quality of service, afford to continue to provide good customer service to it’s users, and make enough money to stay in business? If the carriers can these questions in the affirmative, then they are doing something right. Another question that needs to be answered is, “Are these just teaser rates that won’t last long?” Will these carriers decide in 6, 12, 18 months that, “hey, what were we thinking, we can’t do this anymore,” and raise their rates again? As a consumer who likes to save, I hope this is not the case. However from a business perspective, I find it hard to believe that these carriers all found a way to take $10 off the top and still maintain big enough profit margins to pay for all the advertising, employees, and general operating expenses that go into running a wireless company. I think this is a good old fashioned “land grab”, where they are all trying to amass as many customers as possible and hope for the best.
That’s just my opinion.
{ 1 comment… read it below or add one }
I think it’s not the rates, but WHO is offering those rates. In paygo, it’s simple. It’s all finite, capped and everything is paid for. Even Ptel’s incredible 10 cents a meg rate comes out to $10o a gig. No way a carrier can lose money on paygo. But unlimited? In this arena, there are basically three players: 1)Prepaid Divisons like Tmobile 2Go, Verizon InPulse and Att Gophone. 2) Mvnos. Resellers of the Big 4 networks like Simple (Tmobile), Platinum Tel (Sprint), Air Voice (Verizon and Att). 3)Independent regional carriers . Smaller companies with their own infrastructures varying from one state only to nearly national. (Pocket, Revol, Metro, Cricket, etc).
Of these three, the regional carriers and Big 4 have the true advantage in unlimited because they OWN THEIR OWN NETWORKS and don’t have to pay a middle man , unlike the mvnos who are at the mercy of their parent carrier.
The disadvantages of course are that prepaid divisions are usually costlier (Simple Mobile Unlimited everything is $60 vs $80 on Tmobile Flexpay monthly) or in the case of regionals, have less coverage (Pocket’s network only covers a couple of states, the rest is roaming).
Therein lies the tradeoff. The mvnos have the best paygo rates as hardly any regional carriers even have paygo with many being exclusively unlimited only. And the big prepaid divisons usually cost more then their mvnos, from somewhat (Sprint’s Common Cents 7 cents a minute vs Ptel’s 5 cents a minute) to a lot (Verizon/Att prepaid’s 25 cents a minute vs Verizon/Att mvno prices from 4-15 cents a minute).