Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

Will Sprint's prepaid price cuts bring subscribers back?

By | May 13, 2010, 10:32am PDT

Summary: Sprint cut prepaid phone service prices again and cut a distribution deal with Wal-Mart. The moves could boost Sprint’s subscriber base.

Sprint upped its bet on prepaid phone services as it launched a new brand dubbed Common Cents Mobile that will be sold online and through Wal-Mart.

The wireless carrier has been struggling with subscriber losses for multiple quarters. The trends have been improving, but Sprint still can’t add customers—the company lost 75,000 net subscribers in the first quarter. At the same time, Sprint has been betting big on prepaid phone service with brands like Virgin Mobile and Boost.

Can a money-back guarantee lure you to Sprint?

On Thursday, Sprint unveiled Common Cents Mobile, which will debut at more than 700 Wal-Mart stores beginning May 15 (statement). Sprint is offering 7-cent voice minutes and 7-cent text service.

Among the features of Common Cents Mobile:

  • Minutes are rounded down so if you talk for 1 minute and 50 seconds you pay for 1 minute.
  • Handsets include the LG101, Samsung M340 and the Kyocera S2300.
  • Minutes can be added via a Web site or refill cards.

Piper Jaffray analyst Christopher Larsen said in a research note that Sprint’s plan “brings the per minute cost to a new low for pay-by-the-minute services.” Larsen added that MetroPCS and Leap Wireless are likely to feel the fallout.

Larsen adds that there’s a prepaid price war underway. He said:

While the plans do not compete directly with the unlimited prepaid offers, we believe another price cut in the industry demonstrates that there are no signs of stabilization in the near-term, and will be read as a negative data point for all prepaid carriers. Additionally, Sprint’s plan will now compete for shelf space at Wal-Mart stores with other service providers, including Leap, MetroPCS, TracFone, Verizon and AT&T.

What’s unclear is whether these value pricing moves can reverse Sprint’s subscriber losses?

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Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

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RE: Will Sprint's prepaid price cuts bring subscribers back?
yarinsiz Updated - 11th May 2011
Well done! Thank you very much for professional templates and community edition
seslisohbet seslichat
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One is mobile-to-mobile phone calls, which I'll only use it for just a dollar a day for when I use it. But the sad fact is that I'll have to pay $15 for minimum if I were to use it for 30 days. I really want to pay only $5 or $10 depending on how much I use it. I really don't like to have airtime expired at the end of 30 days if I pay $15 a month. Of course, I don't have to pay monthly, but if I only use $5 out of $15 that I pay and I don't use the phone after 30 days and I have $10 left, that $10 will be gone. If I need to check my voicemail, I'll have to pay 10 cents per minute even when I'm in the Verizon network. My family is with Verizon Wireless, which gives me advantage of having mobile-to-mobile unlimited minutes. But I have to pay $1 for 24 hours to use it. sad

I'm sorry but I'm cheap! I pay $1.95 a month for my CallCentric 407 phone number, 2 cents a minute if I make a phone call, and 1.5 cents a minute if I receive a phone call. Thus, I pay $1.95 a month if I don't make/receive phone calls and up to about $3 to $5 a month if I do, depending on how much I make.

I really want to get myself a Windows Phone 7 phone when it comes out, but I don't want a voice plan. I cannot justify having either 200 minutes or 450 minutes for whatever the price I pay. But then I'll be stuck with paying Verizon's $55 a month for a smartphone data plan (feature phone data plan is $35 a month). sad
I THINK EVERY PHONE COMPANY PLAN IS ONLY TRYING THEIR BEST TO SCREW US AS MUCH AS POSSIBLE FOR THE BIG $$$$$$ THEY CAN GET FROM US . sad
While this comment is not directly on subject, there's little question all these phone companies are financially raping the public. How about the additional $10/month data package they force everyone who uses a "smartphone" to pay, even if you don't use the texting service. Their TV ads should feature people wearing masks and holding guns since that's the way thieves are usually portrayed. Among them all, Verizon is clearly the worst!
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Well done! Thank you very much for professional templates and community edition
seslisohbet seslichat

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