We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Competition Intensifies in the U.S. Wireless Prepaid Market
Read MoreHide Full Article
Competition is intensifying in the U.S. wireless prepaid market. The gap between prepaid and postpaid average revenue per user (ARPU) has narrowed significantly, forcing telecom biggies to turn their attention to the domestic prepaid mobile service business.
This was not the case even a few years back when the prepaid segment was largely ignored by wireless carriers interested in the lucrative postpaid wireless market. However, this new development has forced these wireless operators to concentrate on the prepaid segment, consequently escalating, competition in this market has intensified.
Unlimited Data Plan War
Stiff pricing competition in the industry is a genuine concern. Recently, we witnessed the four major wireless telecommunications companies participating in the unlimited postpaid data plan war in order to stand out in the landscape. These wireless operators are now extending their unlimited data plan to the prepaid market as well.
U.S. telecom behemoth AT&T Inc.’s (T - Free Report) Cricket prepaid wireless brand, which it acquired after the takeover of Leap Wireless, recently cut the price of its existing unlimited plan from $70 to $60 a month. T-Mobile US Inc.’s (TMUS - Free Report) MetroPCS prepaid mobile brand has expanded its monthly 8 GB plan to include unlimited data.
Similarly, Sprint Corp. (S - Free Report) has decided to strengthen its Boost Mobile prepaid wireless brand by offering four lines of compressed unlimited data for $100 a month to users who switch carriers. Sprint’s Virgin prepaid brand also followed suit with a new $60-a-month unlimited plan.
Furthermore, United States Cellular Corp. (USM - Free Report) has introduced unlimited high-speed data on its Simple Connect and Ready Connect Prepaid offerings, for $70 per month. In addition, the company has streamlined the plans and added more data to its $35 and $45 plans, which now come with 1GB and 5GB data, respectively. United States Cellular currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bottom Line
Rapid technological invention and innovation have resulted in significant competition within the telecommunications industry. Product life-cycle and upgrade-cycle have gone down drastically with several firms coming up with new versions of products and services within a short span of time. To combat competition, the players are thus increasingly looking at new avenues. Extending unlimited data plan to the prepaid market is one such avenue.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Competition Intensifies in the U.S. Wireless Prepaid Market
Competition is intensifying in the U.S. wireless prepaid market. The gap between prepaid and postpaid average revenue per user (ARPU) has narrowed significantly, forcing telecom biggies to turn their attention to the domestic prepaid mobile service business.
This was not the case even a few years back when the prepaid segment was largely ignored by wireless carriers interested in the lucrative postpaid wireless market. However, this new development has forced these wireless operators to concentrate on the prepaid segment, consequently escalating, competition in this market has intensified.
Unlimited Data Plan War
Stiff pricing competition in the industry is a genuine concern. Recently, we witnessed the four major wireless telecommunications companies participating in the unlimited postpaid data plan war in order to stand out in the landscape. These wireless operators are now extending their unlimited data plan to the prepaid market as well.
U.S. telecom behemoth AT&T Inc.’s (T - Free Report) Cricket prepaid wireless brand, which it acquired after the takeover of Leap Wireless, recently cut the price of its existing unlimited plan from $70 to $60 a month. T-Mobile US Inc.’s (TMUS - Free Report) MetroPCS prepaid mobile brand has expanded its monthly 8 GB plan to include unlimited data.
Similarly, Sprint Corp. (S - Free Report) has decided to strengthen its Boost Mobile prepaid wireless brand by offering four lines of compressed unlimited data for $100 a month to users who switch carriers. Sprint’s Virgin prepaid brand also followed suit with a new $60-a-month unlimited plan.
Furthermore, United States Cellular Corp. (USM - Free Report) has introduced unlimited high-speed data on its Simple Connect and Ready Connect Prepaid offerings, for $70 per month. In addition, the company has streamlined the plans and added more data to its $35 and $45 plans, which now come with 1GB and 5GB data, respectively. United States Cellular currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bottom Line
Rapid technological invention and innovation have resulted in significant competition within the telecommunications industry. Product life-cycle and upgrade-cycle have gone down drastically with several firms coming up with new versions of products and services within a short span of time. To combat competition, the players are thus increasingly looking at new avenues. Extending unlimited data plan to the prepaid market is one such avenue.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>