The Prepaid Press - February 15, 2008 - (Page 12)

PREPAID WIRELESS February 15 · 2008 - 12 Prepaid Wireless Roundup By Joe Pawlikowski Boost Unlimited gains, Boost traditional loses Since its inception in 2007, Boost Unlimited, which provides subscribers with unlimited minutes for a flat monthly fee, has been on the rise. It was originally only offered in Los Angeles and areas of Texas, but some initial successes led to its expansion. It hit 100,000 customers after the second quarter of 2007, and more than doubled their subscriber base during the third quarter. They’ve doubled up again in the fourth quarter, adding 256,000 subscribers. The service expanded its borders in October 2007. The new markets included Florida, Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Nevada, North Carolina, Oklahoma, Tennessee, and additional areas in Texas and California. This puts them in direct competition with prepaid providers Cricket Communications and MetroPCS, who also offer flat-rate fees for unlimited monthly calling. The downside for Boost is that it lost 202,000 customers from its traditional prepaid services. This is the second consecutive quarter in which Boost traditional has lost while Boost Unlimited has gained. Surely, a portion of the people who dropped Boost traditional picked up Boost Unlimited. Even so, this still means that Boost traditional is failing to attract new subscribers. Boost is a wholly owned subsidiary of Sprint Nextel. They made their mark on the prepaid wireless world by utilizing Sprint’s iDEN network, which allows for the use of Boost’s signature walkie talkie -- chirps, they call it. The Unlimited service utilizes Sprint’s CDMA network, which is also used by other Mobile Virtual Network Operators, including Virgin Mobile and kajeet. Sprint and Boost plan to disclose their final 2007 earnings reports on February 28th. FCC, under pressure mainly from Google, mandated that the block be reserved for open-access communications. That is, any non-harmful device may be activated on it. This is antithetical to the telecommunication industry’s current mode of operation, in which the carriers themselves control what handsets are available on their network. But the auction could last a month or more. Bids are anonymous, and the winners will not be announced until 10 days after the auction’s conclusion. Notable prepaid entrants include Leap Wireless and MetroPCS. Absent are the Nos. 3 and 4 wireless networks in America, Sprint Nextel and T-Mobile. 700 MHz auction begins January 24th marked the first of many days in the bidding for the 700 MHz spectrum. The auction, conducted by the Federal Communications Commission, seeks to divvy up spectrum being used by analog television stations. They will have to abandon those airwaves by February of 2009, at which time auction winners will gain control of the spectrum. There was much controversy surrounding 22 of the 62 megahertz available for bidding. The The [Boost] Unlimited service utilizes Sprint’s CDMA network, which is also used by other Mobile Virtual Network Operators, including Virgin Mobile and kajeet. The major players for the most coveted slices of spectrum are Verizon, AT&T, and Google. Another 211 companies are participating in the auction, though most of them are shooting for smaller, more regional slices of spectrum. The first day saw bidding reach $2.8 billion, clearly well short of final expectations. kajeet adds text messaging plans, cuts staff Rumors circulated in mid-January that kajeet, a prepaid MVNO targeted at teens and preteens, was laying off a significant portion of its staff, including its chief marketing officer. However, Prepaid Reviews spoke with CEO Daniel Neal, who cleared up the issue. Roughly 19 percent of the staff was in fact laid off. The company’s CMO left a few weeks before this, to pursue other opportunities. Neal went on to explain the reason for the staff reduction. “You want to raise money when you have it, not when you need it. When you’re a smart and well-managed company, you always have to keep your mind on how your cost structure is evolving. We are very careful with our cash.” The company made some other headlines during the quarter. First, they announced the receipt of $10 million in debt financing. They followed that up by announcing flat-rate text messaging plans. Already at 5 cents per message -- a typical low in the industry -- kajeet announced that they’d be offering 200 messages for $4.99 per month or unlimited text messaging for $19.99 per month. These rates are in line with much of the rest of the industry. Though kajeet’s subscriber and financial data are not publicly available, Neal has said that the company fared well during the fourth quarter, picking up a significant number of subscribers while turning over few. Cricket does well in fourth quarter, expands to Philly Leap Wireless was the first telecom to announce their fourth quarter earnings. This is because they were forced to go back over three years’ worth of financial and customer data because of a reporting glitch. The carrier, which hosts Cricket and Jump Mobile, added 152,000 customers in the fourth quarter, moving their yearly additions to 634,000. They now have a total of 2.86 million subscribers between Jump and Cricket. On the heels of this news, Cricket announced that they would be entering the Philadelphia market in 2008. They struck a deal with the State of Pennsylvania, in which Cricket will put up $40 million in “property improvements and equipment throughout southeast Pennsylvania.” This will help them set up cell sites and establish a switch facility. This will all help them establish themselves in the area as a major provider. Cricket Communications provides unlimited calling plans for a flat monthly rate. They are based in San Diego, and have been making large expansion efforts in late 2007 into early 2008. Leap’s other subsidiary, Jump Mobile, offers pay-as-you-go rates for outgoing calls, and features free incoming calls and text messages. Both subsidiaries, however, require that you stay inside your home calling area, or you will be billed roaming rates. By expanding their network, they are offering a greater home calling area, which will make them more attractive to new subscribers. Prepaid Reviews updates We’ve added SunCom to our featured pay-asyou-go providers. The company was recently bought by T-Mobile. We’ve also created an MVNO relationship chart, which notes which MVNOs use the service of what major networks. If you’re confused about who provides what service, give it a look. Joe Pawlikowski is a Senior Editor for Prepaid Reviews, an independent website that reviews prepaid cell phone providers and reports on the prepaid wireless industry. He can be reached at info@prepaidreviews.com http://www.telritewireless.com http://www.xcytemobile.com http://www.usepuremobile.com http://www.telritewireless.com sales@telritewireless.com http://www.telritewireless.com http://www.xcytemobile.com http://www.usepuremobile.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - February 15, 2008

The Prepaid Press - February 2008 Beachfront Property for Sale Cardholder Facing Systems Contents The Retske Report: Getting the Word Out 5 Minutes With Mark Flanagan, CEO of PrepaidWireless.com Regulatory Rundown: Mid-Winter Update 2008 Prepaid Wireless Handsets Consumer’s Union Raps Wireless Industry Prepaid Reviews Launches Canadian Website Maginpins and TúYo Mobile Form Alliance Prepaid Wireless in Brief Boost Mobile Introduces New $1/Day Chat Plan Mobile Voice to Overtake Fixed in Europe Prepaid Wireless Roundup Another Kind of Prepaid Calling Spot Rates VSNL Wins ATLANTIC-ACM Award The Legal Line Calling Cards in Brief Sapotek Partners with DigiLinea Pactolus Goes Live at Cable MSO Low-Income Market Initiatives to Drive Mobile Banking Payments in Brief Monitise Americas Expands Payments Network Charge Anywhere Mobile POS Wins Award Hypercom Introduces System for Small Merchants TIO Networks Announces TIO Prepaid MasterCard NPBCA Makes Leadership Change A Walk Down the Aisle Branding Your Retail Store Retailers Welcome Senate Approval of Stimulus Bill NRF Forecasts 3.5 Percent Growth in Retail Sales Cyphermint Teams With DHL Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - February 15, 2008

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