Sprint Nextel Goes for Broke: Introduces the Lowest Prepaid Plan in the Industry

Sprint is apparently going for the prepaid data-user market here. That is, kids who text 24 hours per day and those who check Facebook status like it's going out of style. Oh, and that may make a phone call from time to time. Sprint's cadre of prepaid brands is now taking on some serious meat. I'm not sure if Sprint has ceded the contract wireless market to AT&T and Verizon Wireless, but it sure is trying to tie in as many prepaid customers as it can with the Beyond Talk brand, the Virgin Mobile brand and the Boost Mobile brand as well.

The gamble is this: Sprint has to make these new prepaid customer additions (which are quite nice, by the way) as profitable to the bottom line -- and more -- compared to the competition. Sprint can't just hope to offset the loss of more lucrative contract wireless customers by adding cut-rate prepaid customers or its share price won't ever budge to the $5+ level in a sustained way any time soon.

Somehow, Sprint has to stop the bleeding on the contract side and continue adding hundreds of thousands of prepaid customers per quarter -- at a minimum. That, or those who are long on S may not be going anywhere fast. Remember the $20+ days of 2007? Are they to return? Sprint is banking on its continued prepaid assault to see if it can climb out of the deep hole it just cannot climb out of.