Boom time for prepaid mobile phone operators
First-quarter earnings reports MetroPCS Communications and Leap Wireless on Thursday provided further evidence that consumers are not flocking to the contract, unlimited prepaid services. These carriers, which operate mainly in small towns, each reported that they had almost doubled their subscription, compared with a year earlier.
MetroPCS said its new subscriber additions increased 51 percent compared to the same quarter last year. In total, it added 684,000 new subscribers, bringing its customer base of 6 million people. This was the third consecutive quarter, when the company was a record increase in subscribers.
Leap Wireless, which sells its services under the brand of cricket, also had a great quarter, an increase subscribership by 40 percent compared to the same quarter last year. In total, the company added 493,000 new customers, the end of the quarter with 4.3 million wireless subscribers. A year ago, Leap has completed the first quarter with 3.1 million customers.
MetroPCS to increase revenues by 20 percent to $ 795.3 million and posted profit of $ 44 million.
Leap actually posted a wider first quarter loss, largely due to the expansion of the company into new markets such as Chicago and Philadelphia. The company lost $ 47.4 million, or 74 cents per share, compared to the loss of $ 16.9 million, or 28 cents per share, in the first quarter of 2008. Revenue increased 25 percent to $ 587 million.
All this news comes just days after Sprint Nextel reported a subscriber huge benefits to its prepaid service on its subsidiary Boost Mobile. Increase added nearly 764,000 customers for its services.
With all three services in general, they offer a low-cost, prepaid plans, all-You-Can-there voice, text messages, as well as a web browser. Explosion Unlimited service, which began in January, costs just $ 50 a month. And MetroPCs leap and services are in the same area.
Based on these strong subscriber numbers, it appears that consumers are seeking more affordable cell phone plans. This is most likely a direct result of declining economy, which has led to high unemployment in the country.
While it is true that cell phone service has become a key for most Americans, it does not mean consumers are willing to pay much money for it. As well as tightening finances, are expected to reduce their monthly costs of finding cheap versions of the phone service. Prepaid service plans that allow customers to pay in advance for the service without signing a contract, represent a good alternative. Now low-cost unlimited plans make it an easy choice, even for wireless subscribers that a lot of talk and text.
MetroPCS and Leap Wireless, each offering its low-cost prepaid unlimited plans for quite some time, but because these carriers are moving in large markets such as Chicago, Philadelphia and New York, they put pressure on other wireless operators match or beat their prices .
Sprint was the first to raise to meet this challenge with their $ 50 unlimited plan. Virgin Mobile and then with its all-You-Can-has a plan for $ 50 a month. A T-Mobile USA, owned by Deutsche Telekom, is also becoming more aggressive in their prepaid mobile phone plans.
Now, the question of whether the two largest cellular phone companies AT & T and Verizon Wireless, which makes millions of dollars in revenues from postpaid subscribers, will also go after the prepaid market. And if they do not, they will feature the prices of their post-contract service plans? AT & T already is rumored, is considering lowering the price of its iPhone service plan for $ 10, when the new iPhone goes this summer.
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Tags: Boost Mobile, cell phone, economy, Leap Wireless, MetroPCS, prepaid wireless, price war





