Cricket Ratchets Up Prepaid Offers, Unlimited Web Now Included

Cricket Communications, owned by Leap Wireless International, has ratcheted up its own offers in the budding value and price wars in theprepaid wireless business.

Cricket’s $40 monthly plan, which already includes unlimited voice, long distance, domestic and international text and picture messaging, and nationwide coverage, now will include unlimited Web, unlimited 411 and unlimited service to more than 4,600 cities and towns across the US.

In addition, Cricket’s $45 monthly plan in these markets will now include the additional features of unlimited email, unlimited data backup and 30 roaming minutes per month. The $55 plan mirrors the $45 plan but also contains 200 roaming minutes per month.

The new plans take effect August 4, 2009, in select Cricket markets that cover approximately 72.3 million potential customers.

"The new features we have included in our service plans significantly increase the value we deliver to our customers," says Al Moschner, Cricket COO.

And that appears to be the story: the prepaid market is in a new stage of development where the "standard offer" is changing quite radically.

Affordable Smart Phones Next Big Thing?

Despite dramatic downward shifts in expectations for handset shipments in 2009 and 2010 as a result of the economic recession--some forecasts call for sales declines of perhaps 10 percent overall--smart phone growth continues.

In the U.S. market, AT&T has predicted that 75 percent of its device portfolio will be comprised of QWERTY input devices by the end of 2009, and those devices assume a broadband connection or at least heavy text messaging.

One can argue that the biggest They will, however, face strong competition from the BlackBerry Curve, LG Voyager and other devices designed for this growing segment of consumers interested in a better messaging and Internet experience with QWERTY inputs and at an affordable price.

The key benefit for operators in offering a greater array of smart devices is simple: increased spending on wireless data services.

On average, survey respondents who own smart phones spend 21.8 percent more on their mobile communications than feature phone users, says the Yankee Group. In part, that is because smart phone users have higher incomes.

But that will change. A new generation of more affordable Android devices, for example, are slated for launch in 2009 will be focused to attract customers who are in lower income brackets and who simply aren’t interested in spending $2,600 for their mobile phone service when the cost of a two-year contract is bundled with a particular smart phone.

And smart phone usage skews to younger demographics, primarily the 18 to 44 age demographic.

Some 41 percent of the 1,519 respondents surveyed by the Yankee Group also indicated they were either likely or very likely to purchase a smart phone and a data plan as their next mobile device.

Google Voice "Not Really VoIP"?

There has been a fair amount of chatter over the last week about Google Voice "not really being VoIP." That misses the point.

Users don't care about how we label things, nor do they care how things get done. They only care about value, utility, fun and other things of a useful nature.

Whether Google Voice is "really VoIP" or not misses the point. People like and use technology the way they want, not the way we think they "should."

YouTube Adds "News Near You"

YouTube is customizing its video feeds with a "News Near You" function that allows users to view clips related to their locations.

"News Near You" grabs video clips from sources within 100 miles of your computer’s IP address. YouTube promises to share revenues with TV outlets, but it’s a double-edged sword for local broadcasters, as is the case for print and other forms of news content.

The extra exposure and promotion, plus some possibility of increased advertising, will be helpful. What might not be helpful is one more reason for users to avoid broadcast outlets and rely on Internet mechanisms.

YouTube has deals with content sources such as ABC News, Reuters and AP. So far, about 200 news outlets have signed on to YouTube’s local video-casting initiative.

71% of Wireless Users Watch Video, 19% Have Uploaded Video

You likely would not be shocked to learn that 62 percent of Internet users watch online video. But you might be surprised to learn that wireless connectivity has emerged as a strong predictor of online video viewing.

Fully 71 percent of users with wireless connectivity watch videos on video sharing sites compared with just 38 percent of those who do not access the Internet wirelessly.

"Our latest data shows that 14 percent of cell phone users have watched video on their devices, slightly up from the 10 percent we found in 2007, Pew Internet & American Life researchers say.

Cell phone users are more likely to record video on their cell phones than they are to watch it, Pew researchers say. About 19 percent of cell phone users now say they have recorded video with their phone, in addition to watching video.

If you wonder why mobile service providers are racing to add bandwidth, that's why: video consumption and video creation.

Many users are turning to the Internet to watch entire television shows and movies, as you also might have guessed. Overall, 35 percent of adult Internet users say they have watched television shows and movies online.

What Sprint Nextel's Pre Marketing Might Mean

Sprint Nextel has been criticized by some observers for not spending more money to promote the Palm Pre while Sprint Nextel has a six-month exclusive to market the device.

So here's a thought: maybe Sprint Nextel has concluded that the benefit from heavier promotion over the first six months will not provide a big-enough payback, and might simply pave the way for Verizon Wireless to sell even more Palm Pres when it begins selling the device after the Sprint exclusive ends.

Given the Federal Communications Commission's inquiry into handset exclusivity and the practice of tying handset discounts to contracts, perhaps we ought to consider just a bit more seriously the argument that handset exclusivity might provide consumer benefits.

Perhaps Sprint Nextel's allegedly tepid support for the Pre is a direct reflection of estimated benefit. Perhaps the inability to obtain a longer-term exclusive so dilutes the financial upside that it isn't worth more promotion.

Nor is it altogether clear consumers have clearly understood that contract-free service that requires users to pay retail prices for handsets might be a bit painful.

That isn't to say consumers should be barred from buying unlocked handsets at full retail. Prepaid customers do it all the time. But neither should customers be prohibited from buying subsidized handsets, with contracts, if that is what they prefer.

JD Power Study Suggest Potential for Huge Prepaid Wireless Shift

About 16 percent of prepaid wireless users have switched carriers in the past 12 months. Some 51 percent of those switchers previously had contract service, a new survey by JD Power and Associates says.

About 12 percent of those surveyed said they would switch carriers sometime in the next year, compared to 13 percent in 2008.

Among those intending to switch, 24 percent intend to switch to contract service. That suggests 75 percent of switchers would consider prepaid plans.

And there are clear differences between "pay as you go" users and prepaid customers, suggesting two clear niches. The study also finds the average pay-as-you-go user is older, more likely to be retired and has fewer wireless phones in their household.

The monthly prepaid plan user more closely resembles the contract plan user, desiring a large network, mid-range feature phones and messaging, but without the commitment or penalties of a contract.

That is likely the most significant finding, as it suggests the real difference between prepaid and postpaid users is in fact not so much ability to pay or demographics as it is preference for terms of service.

That is not to say some prepaid users are "credit challenged" or lower income. But the survey suggests the potential prepaid audience is quite a bit larger than it has been in the past. "Mainstream" postpaid users might in fact be persuadable candidates for prepaid.

About 66 percent of prepaid users who renew monthly report that they have cut ties with their former contracted service carrier. That suggests huge possibilities for market share shifts as well.

Pay-as-you-go users spend an average of $35 for each airtime purchase, a decrease of $5 from 2008.

Monthly non-contract users spend an average of $25 less per month than those with contracts do. They report spending $56 per month compared with an average monthly service cost of $81 for contract users.

Non-contract customers report using 320 minutes per month—a notable increase from 233 minutes in 2008.

Pay-as-you-go users report using an average of just 145 minutes, while monthly non-contract users report an average of 573 minutes per month.

According to the study, more than 40 percent of non-contract plans are monthly plans, compared with less than 30 percent in 2008.