New prepaid unlimited plans causing market volatility
Straight Talk, has caused a bit of a swirl in the markets this week. While stock prices of prepaid companies isn’t typically our domain, this one has to do with service. Earlier in the week shareholders largely dumped shares of MetroPCS and Leap Wireless amid concerns over a pricing war, sparked by Straight Talk’s cheaper unlimited plan. Of course, both Metro and Cricket offer $45 plans which are comparable to Straight Talk. So what gives? It appears the fears were just a bit overblown. It did lead, though, to a few frank comments about the prepaid industry. John Hodulik of UBS noted that only 12 million of 50 million total U.S. prepaid subscribers are on an unlimited plan. “As unlimited prepaid service becomes more widely available, we expect many traditional prepaid customers will switch, since the economics of traditional prepaid are inferior to those of unlimited prepaid,” he said. That could mean growth all around. It also helps explain why we’ve seen so many carriers debut unlimited plans in recent months. Chandan Sarkar of Auriga USA noted that the fears were overblown because Straight Talk went with a $45 price point for their unlimited plan, rather than $30 — a plan which still provides 1,000 minutes and 1,000 texts per month. “While some view the new plan as adding more pricing pressure to the U.S. wireless market, we view it as less severe than the worst-case scenario that would have unfolded if the $30 plan had been adopted widely,” he said. Matters, it appears, have returned to normal…for now. Soon enough someone’s going to come in and change the landscape, whether that’s through price or service. However, that won’t be something to panic over — that is, unless you’re an investor in one of the companies that doesn’t keep up.]]>
Don’t quote me Joe. The buzz in the prepaid underground is that longtime major (but very little known) Verizon Mvno Page Plus Cellular will be launching their answers to what’s going on in the wireless industry. Until Straight Talk Unlimited came out, Page Plus was the only Verizon mvno to offer any sort of unlimited option besides Verizon prepaid wireless itself. Page Plus ranges from 1.99 – 2.49 a day depending in what state you are in with no text included. It’s called a daily plan, but it charges you every day whether used or not so it is actually a mislabeled monthly plan.
With ST making waves, affecting Stock prices and directly challenging other Verizon Mvnos with a price point unmatched in the industry (for using Verizon’s network), it makes sense for Page Plus to respond.
If Page Plus gets a plan that is equal to or close to the Straight Talk plan they can use their longtime advantage of being able to use a huge variety of Verizon phones on their network: a big ST weakpoint (three models only for now). Plus if Page Plus has some data package options thrown in , it will address their longtime weakness in that area too. Current data prices are expensive and plans are not available, it is strictly a pay as you go basis.
Straight Talk has shaken up a lot of the other prepaids, but it looks like Page Plus isn’t going to just sit their and let their Verizon flavored cake get eaten by the new kid on the block.
Straight talk is undoubtedly the best offer on the market. Both plans are fantastic with the $30 plan giving minutes at 2 cents, texts at 1 cent and free data it’s cheaper than any contract around. I don’t know who would use more than 1000 minutes but $45 is not allot for those who do.