A lot of the prepaid market has been thrown into flux as competition spreads thin and as the so-called “Un-carrier” is pulling down massive postpaid offerings to the lower end of the price spectrum. In fact, average user revenue figures for both US postpaid and prepaid accounts have come closer to each other in the past year or so.
Sprint has been able to pull Boost Mobile back into growth “for the first time in many, many quarters” through aggressive service value and relatively decent device portfolio with low price maintenance. The Now Network has also been cleaning up house as well and has seen a recovery in its user base.
So, how does the conglomerate’s second prepaid brand, Virgin Mobile, get turned around?
“You’re going to see us test different models. One model we’re testing that we like is a potential—rather than subsidizing handsets, actually providing free airtime with no subsidy on the handset,” said CEO Marcelo Claure at an investor conference. “So you’re going to see Virgin be our disruptor brand.”
Device subsidies can prove pretty substantial for the typical lower-income prepaid customer. Even selling a phone with MSRP of $179.99 at $50 off can make a big dent in the bills. Meanwhile, Virgin Mobile has also taken the lead of its sibling Boost in offering unlimited calling, texting and data with high-speed caps. What “free airtime” means could be the straw that breaks the camel’s back here.
Sprint lost 427,000 prepaid users in the third quarter. It planned on relaunching Virgin last year before slowing down plans and is now targeting that campaign for this year.