The Prepaid Press - March 15, 2008 - (Page 8)

PREPAID WIRELESS March 15 · 2008 - 8 Prepaid Wireless Roundup By Joe Pawlikowski do so would disqualify the auction. A new one would take place, where presumably the openaccess provision would be removed. Then we have Google, who was heavily rumored not to be interested in the spectrum at all. Rather, their interest lied in the aforementioned open-access provision. They lobbied to have it included, and felt that they had to participate in the auction as a symbolic gesture. After a day or so of stagnation, the bid was pushed over the mark. Analysts believe that Google pushed the bid over the reserve mark, and Verizon, not wanting to lose out on the spectrum, topped it. AT&T, who was said to be bidding on some of the non-restricted regional licenses, reportedly bowed out because of the 700 MHz spectrum they acquired in the purchase of Aloha Partners. Prepaid providers Leap Wireless and MetroPCS are in on the regional licenses, and each could come away with pieces to expand their respective networks. The two companies cannot re-open merger talks until the auction concludes, because of FCC anti-collusion rules. $10 million in payments in April of last year. According to bankruptcy law, debtor companies can retrieve some of these payments made in the period prior to filing -- 90 days to be spe- Amidst losses from their traditional prepaid service, Boost Mobile introduced a $1 per day plan. cific. The company is targeting Merrill Lynch for a large portion of these payments made. There are a few other companies involved, though Amp’d is trying to recoup less than $1 million from each. While they’re trying to recover funds from other companies, they’re also seeking $1.15 million from former CEO Peter Adderton, who was issued those funds just prior to bankruptcy. He stepped down once the bankruptcy papers were filed. Prepaid providers Leap Wireless and MetroPCS are in on the regional licenses, and each could come away with pieces to expand their respective networks. 700 Mhz Spectrum Auction Meets Reserve Price The much ballyhooed 700 megahertz auction reached a milestone in early February. While many of the regional blocks bid up quickly, the C block -- the open-access one -- hit a snag once it approached the $4.6 billion reserve mark. While bidders are technically anonymous, analysts believed that both AT&T and Verizon were hesitant to push it above that mark, as failure to Why the mention of merger talks? It might become necessary for the two companies, because of another development in February. Carriers Jump onto Unlimited Bandwagon Metro and Leap Wireless’s subsidiary, Cricket Communications, are known for providing unlimited calling and text messaging at a flat monthly rate. The only drawback is that they each own regional networks, so roaming can become rather expensive. The major carriers decided to jump in on the unlimited game, each offering some form of unlimited voice for $99 per month. Verizon was the first to announce this, followed by AT&T, and then T-Mobile, who added unlimited messaging to the package. Sprint, who owns Boost and, thus, Boost Unlimited, has stayed back, though analysts believe they can jump in with a similar plan for less, undercutting their rivals. Metro and Leap both offer a greater service package for about half the price of the major carriers. So why don’t people see the deals with the major carriers and turn to Metro and Leap? Coverage. Some people travel and cannot afford the hefty roaming rates. Others simply don’t receive coverage from either network. This is where the 700 MHz auction comes into play. Both companies will presumably bolster their networks with auction additions. Still, neither will likely have enough national coverage. A merger would enable the two companies to act as a national provider, as long as their respective 700 MHz acquisitions fill their network with enough traffic. This would offer customers flatrate, unlimited calling on a prepaid basis, and at a fraction of the cost of the major carriers. Results of the auction won’t be known until 10 days after it closes. This could happen as early as mid-March. Amp’d Returns From Grave To Seek Misgiven Funds One of the bigger stories in prepaid last year was the demise of Amp’d Mobile. The youthoriented company had been burning through money in an effort to relay premium content to its subscribers. Fed up with the company’s financial performance, its biggest investor, Verizon Wireless, called in the debt, and Amp’d was unable to pay. They filed for Chapter 11 bankruptcy in late May. It has come to light, though, that they made Boost Adds Unlimited Options, Changes Logo Amidst losses from their traditional prepaid service, Boost Mobile introduced a $1 per day plan. This is very similar to AT&T’s GoPhone plan, where $1 per day gets you a 10 cents per minute rate and unlimited mobile-to-mobile calling. However, Boost has upped the stakes here, adding unlimited nights. While Boost does hold this advantage over AT&T, AT&T’s unlimited mobile-to-mobile is still seen as more attractive, since they have the most subscribers in the U.S. Boost also announced that they are dropping their 600-minute monthly plan from $70 to $60. This is likely in response to the high demand for their Boost Unlimited service, which in most markets comes in around $50 or $60 per month. On the marketing end, Boost is changing their target audience. They were once a bastion for the youth market, offering “edgy” commercials and the slangy catch phrase, “Where you at?” Now, though, they’re targeting an older demographic: mid-30s. Like their price reduction, this can be related to Boost Unlimited. The flat-rate, unlimited plan surely appeals to people outside the The major carriers decided to jump in on the unlimited game, each offering some form of unlimited voice for $99 per month. youth demographic, and Boost wants to capitalize on that. Yet they fear that sticking with their youth-oriented marketing campaigns could have ill effects on a product that appeals to older folks. And so they’ve created a nonoffensive logo. 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.allstateprint.com http://www.allstateprint.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - March 2008

The Prepaid Press - March 2008 tppEXPO’08 Slated for August 19-21 AT&T Strikes Back Contents The Retske Report: Net Neutrality 5 Minutes With Terry Maher, NBPCA Counsel Regulatory Rundown: FCC Enforcements Prepaid Wireless Roundup Prepaid Wireless in Brief tppEXPO’08 Spotlight BlackBerry Prepaid Option to be Offered Virgin Mobile USA Ringbacks Growing The Splitting of a Titan The State of Prepaid Technology: Part II – The Other Prepaid Calling Spot Rates Calling Cards in Brief IVR and Stratus to Offer SIP Platform PhoenixSoft Completes Integrated IP Transcoding The Legal Line Web Streamlines Bill Pay & Prepaid Distribution Travelex Debuts New Foreign Currency Packs TSYS and Telrock to Provide Mobile Solutions Payments in Brief NBPCA Offers Tips to Fight Money Laundering Hypercom Responds to Ingenico Inquiry Kiosks Change the Face of Prepaid Prepaid 101: Prepaid Wireless Coinstar to Expand Centers in Wal-Mart Locations Meta and MoneyGram Partner NRF Battles Retail Crime Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - March 2008

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