When Sprint Nextel Corp. (NYSE: S) released a $50/month "unlimited everything" plan with its Boost Mobile prepaid unit back at the start of the year, it never knew what firestorm it would eventually set off. Indeed, that move caused a huge spike in Q1 subscribers to Sprint, with a number north of 700,000 -- and it caused the prepaid wireless competition to start offering low monthly costs for unlimited talktime plans (often with unlimited use of other features).
Tracfone, the largest prepaid service in the U.S., has finally fallen into place. The prepaid reseller's "Straight Talk" pan will cost $45 per month for unlimited talktime, further making comparisons of prepaid and post-paid wireless easy for many cash-strapped consumers. With post-paid wireless plans costing $99 and up for unlimited talk, prepaid plans for half the cost are soaring during the recession.
The only downside is the fact that higher-end phones generally are not available with prepaid carriers, nor are advanced features. But a phone is mostly for talk, right? After all, Leap Wireless featured unlimited talk in its prepaid plans quite a while ago, but only with local calling access. Tracfone's is nationwide, all the time.
Although Piper Jaffray analyst Chris Larsen said Tracfone's new offering "would hurt U.S. carriers overall," that doesn't matter. Like many industries where intense price competition has yielded a smaller crop of competitors, this seems now to be happening in the prepaid wireless market as well -- and that's nothing but a good thing for consumers not wanting to sign a two-year service contract for what millions see as a necessary commodity -- quality wireless service for a fixed cost.
Why is gold marching higher? Ask the central bankers
Newspaper ad revenue of 28%, 8 quarters of double-digit drops
Closing Bell: Earnings working against stocks (BCRX, DELL, DHI, INTC, LEAP, PCS)
Reader Comments (Page 1 of 1)
7-06-2009 @ 5:21PM
Wayne said...
Oh, this is a lovely development in the cell phone marketplace. Tracfones on the Verizon network at $45 for unlimited sounds like it is too good to be true. Fortunately, it is true. This is a great value plan on a great network. I will definitely be getting one of those.
7-06-2009 @ 5:27PM
Jenny Milingtow said...
I think it's fantastic that Tracfone is making cell phones affordable to everyone. Last month I bought the new Straight Talk that gives 1000 minutes, 1000 texts and 30MB of data plus free 411 calls for $30 and I'm very happy with it. The phone is good and I love only paying 2 cents per minute and 1 cent per text but if I can exceed 1000 minutes then I may change to this unlimited Straight Talk package which is great value for big time talkers.
7-22-2009 @ 7:08PM
PrepaidWirelessGuy said...
This is definitely great for customers. Hopefully the offer is profitable and sustainable for carriers and are here for the long term.
Expect to see higher end phones as well as technology evolves and pricing comes down. Then we'll really see prepaid move into the mainstream!
www.prepaid-wireless-guide.com