T-Mobile’s Retailer Strategy Focus Shifts To Monthly4G, Indicating Company Strategy If AT&T Deal Fails?

As T-Mobile watches the uncertainty surrounding their AT&T takeover deal, the company is pushing hard to win no-contract customers, perhaps indicating what the company strategy could look like if the AT&T bid fails. While the company line is to focus all its energy on ensuring the AT&T deal comes to pass, Deutsche Telekom is working with independent T-Mobile retailers to provide extra incentives to sell the newer, cheaper prepaid services.

T-Mobile is fighting a tough battle for the more lucrative postpaid customers against A&T and Verizon especially with customers hesitating to either resign with T-Mobile or join them altogether amid an uncertain future. Given this uncertainty, T-Mobile’s fight now begins to focus on prepaid carriers like MetroPCS, Leap, Cricket and Boost Mobile.

T-Mobile has introduced a new tiered compensation plan for dealers giving them a higher up-front payment to promote the $50 and $70 Monthly4G plans.

“In the past, we’ve not been very attentive to prepaid customers,” said Todd Heiner, whose Salt Lake City company, Express Locations LLC, runs more than 80 T-Mobile stores in 10 states. But T-Mobile’s new incentives are “really encouraging everyone to not let [a customer] walk out of a store before we’ve talked about Monthly 4G.”

T-Mobile declined to speak to the Wall Street Journal but did confirm the launch of a new compensation structure for dealers regarding the new Monthly4G offerings. T-Mobile is also working with store owners to expand into 2012 amid concerns that the AT&T deal could take longer to receive approval than previously thought.

“I’m sensing a clear sense that, ‘Hey, this is going to take a long time if it ever does get approved, and we better get 2012 planning done, because we may be independent for longer than we thought,'” said Todd Heiner, a T-Mobile dealer based in Salt Lake City.

Officially, T-Mobile says their prepaid expansion plans were in place months before the AT&T acquisition deal was announced. As T-Mobile has added 933,000 new prepaid customers since June 2010 in the same timeframe it has lost more than 1 million contract customers it’s of little surprise that T-Mobile is shifting some of its focus.

T-Mobile’s largest advantage over other prepaid competitors is the size and speed of their data network that has plenty of room to grow even as T-Mobile remains devoid of a next-generation high-speed network strategy.

“They are in the relatively fortunate position of having a high-quality data network that is relatively vacant,” said Bernstein Research analyst Craig Moffett. “That gives them a lot of strategic maneuverability.

Bernstein analyst Moffett went on to further say that T-Mobile’s new joint plan with Wal-Mart “reveals a great deal about how T-Mobile is likely to position itself in a post-AT&T world, assuming the deal is eventually scuttled…a clear focus on prepaid, with an emphasis on data, as that is where their competitive advantage lies.”

T-Mobile’s newly energized focus on prepaid is leaving the competition wondering how to respond as prepaid customers pay less than contract customers and can equally match the strain placed on the network.

“There’s a great deal of debate right now internally about the sustainability of the promotions that T-Mobile does,” said Sergio Garcia, senior director of business and product management for Leap Wireless, which runs the Cricket prepaid brand.

In response to T-Mobile’s new tiered data plan, some T-Mobile retailers are reporting a rising trend in business in the prepaid market whereas contract customer business remains flat.

While the AT&T/T-Mobile deal remains at least a few months away from seeing a final decision, these prepaid moves perhaps give us a look at the future T-Mobile business model in a post-AT&T world. This isn’t to say T-Mobile would lose focus on its contract customer base, but in a time when prepaid is a hugely growing portion of the wireless market, T-Mobile may be in the right place at the right time to grab a large chunk of it.

Wall Street Journal

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  • Anonymous

    Interesting stuff

  • Chatter

    I agree that TMo’s strength is data in the areas they cover well. Plus, I think customers are more tolerant of “dropped data” connectivity versus dropped phonecalls. It seems like the plan is to go from the #4 full service carrier to the #1 prepaid carrier.

    • They’ve got a lot of work to do to become the #1 prepaid carrier in the US.  Sprint prepaid has a lock on prepaid with Virgin Mobile and Boost.  Virgin Mobile has many users on a grandfathered $25 plan with 300 Minutes, and unlimited everything else.  The price has been raised to $35, and the data is pretty slow, but still a good deal, and a perfectly good solution for most people.  The model with Virgin Mobile is also very easy to understand.  They have a continually expanding and evolving handset lineup, with a good group of Android choices.  Their plans are easy to understand as well.  T-Mobile’s model right now is a little haphazard.  Monthly4G plans with no 4G prepaid boxed phones.  A range of plans that are all very different.  One with 4G up to 5GB, one with 4G up to 100MB.  It’s a little weird.  If they want to really hit it out of the park with prepaid, they need to come up with some continuity in their plans.  Virgin Mobile has $35/$45/$55, all with unlimited data and text.  You just pick the minutes you want… 300/1200/Unlimited.  Easy to understand plans, and plenty of boxed phone choices to take full advantage of the plans.

  • Dpro

    It still shows poor management. It shows that they are just willing to give up postpaid customers and that side of the business which is what I have always been on. It is just one more sign post paid customers should leave. I know that sounds negative but what is projected above does not bode well. Its a resignation to leaving the major leagues for the minors.

    • Dpro

      I mean yes from an investment standpoint it could turn them around but at the expense of post paid customers.

      • This is ridiculous.  The people who buy prepaid phones are either the ones who get prepaid from other carriers or international travellers.  They either don’t want a contract, aren’t going to be around for two years, have their own phone or are the customers you don’t want to put on a contract as they lead to deactivations.  So, taking both into account it’s more about adding a base.

        The focus has always been and continues to be postpaid, but this makes them a little more competitive in the prepaid field.  The main hinderences, at the moment, is like David points out, the merger, and then the fact that T-Mobile still does not have the iPhone.

  • Jordan Bond

    I just ported my postpaid AT&T number to the new Walmart exclusive 5GB data/unlimited text/100 minutes plan. I like the new offerings! It is the perfect plan for me (feature phone provided for voice by employer) and other light talkers.

    • Gina

      I plan on doing the same. If the customers are paying does it really matter if they’re postpaid or pre-paid? 

    • TmoUser

      I thought the Walmart plan was for new customers only? Were you able to port your existing AT&T number to this plan? If so, how did you do that because I am also thinking to do the same. Thanks.

      • 21stNow

        If the customer is coming from AT&T, he/she is a new T-Mobile customer. Or were you asking about number porting only?

    • 454vette

      I wish that current Tmobile customers could have done the same. I was told by multiple reps on the phone it was possible not to worry what I had read online and turns out they all lied. All the prepaid people which is outsourced to India I guess said no problem switch to prepaid and you can do it online and keep the same number and they were wrong as well. Oh well leaving to go somewhere else maybe I can come back in the future with the same number.

  • 1234

    They shouldve keep the flexpay system offering the sames plans for postpaid & prepaid. Depending ur needs flexpay offered afew advantage over the new monthly 4g plans by offering true ulimited data,visual voicemail,discounted handset with contract,& insurance.

    • Respawn


      Flexpay was a joke. I would have rather paid a $400 deposit, but T-Mobile wouldn’t let me pay a deposit at the time. It was Flexpay only. I’m glad they got rid of it. Good riddance to that rubbish.

  • hatesiphone

    lol, this site block me from posting comments, just because i don’t like the iphone how childish is that! everybody have different opinions and choices,  don’t  block people just for that, if you are happy with a pile of sh&t good is your choice, if i am happy with a pile of sh&t, well is my choice. i think blocking people just for saying they dislike the iphone it is very immature.

    • Anonymous

      Engadget blocked me because I said they’re biased.  Everything about Apple and Verizon is good, but the rest don’t stand a chance.  They can block you because it’s their blog, and they control everything about it.

  • James

    Hello David, Add an extra ”T” in the 2nd paragraph for ”A&T” thanks for the great coverage as always!

  • retail rep

    I’m a store rep, and I think while the focus is still mostly on Postpaid prepaid is becoming a much more viable second option.  Reps get paid out more on prepaid plans now and the monthly plans are definitely a great option for someone who doesn’t want to have a contract or doesn’t need a subsidized phone or the ability to put the phone on the bill.  I still think the one thing T-Mobile would be great to have that I believe no other prepaid carrier offers would be handset protection.  As of right now for prepaid phones we require the customer to send the phone back and then they have to wait for T-Mobile to receive then and only then will they receive their replacement.  This is very tedious and is the one flaw I see in prepaid at this moment (besides lack of bill which comes with the prepaid territory).

    • zps

      if i bring in my own phone, i can go prepaid and pay less?  how much? for unlimited 4G data?

  • Lee

    Another thing to consider; if the focus is to shift to a pre-pay structure, the quality of high end phones will likely decrease. Don’t believe me, look at the mytouch line. From HTC to LG.

    • and totally ignore the Mytouch 4g slide or Galaxy S2 or the Amaze 4g

  • Get better pre paid phones though. They are really lacking in the $100-$200 range. The Dart and the Gravity smart are way over priced and lack any features above what cricket phones have. The Optimus while cheaper at t-mobile then it is at cricket has been out for awhile now and is really longing in the tooth. Cricket has a few 3.5in screens for under $175 while T-Mobile has none. They need an upgrade.

    • Anonymous

      for prepaid plans, any phone is compatible. just pop in the sim and you’re ready to go. whether or not you choose to purchase the ones they put in front of you is your choice. otherwise you can go market price on a better phone or look at the used market

      • I know but they don’t have many phones in the $100-$200 range. I already have a phone on my 4g plan but I want a better one. Cricket offers better one’s at the range I’m looking for. T-Mobile doesn’t have any other then the one’s mentioned. Also they shouldn’t rely on me finding some work around to get a nice phone on there setup especially since most unlocked phones that T-Mobile doesn’t offer are not compatible with there 3g/4g services.Also market price is BS. If you look at T-Mobiles website and go to the pre-paid section you will see a brand new Optimus T for $150. Now go to the post paid option and see that they list it there for $250 without a contract. Go to letstalk/Amazon/Walmart and they list the phone for $250+ (I’ve seen some list it at $499 without a contract). If they are looking to suceed in this market with the other pre-paid players they need better $100-$200 phones.

        • Gina

          Can’t imagine why they wouldn’t want you to buy ANY of their phones at the retail price. I think they just offer the garbage stuff to people who don’t care. 

        • Show me 1 phone that is between $100 and $200 without a contract? I don’t have more money then that to spend on a phone.

          Also I have yet to find a phone that beats the Samsung Vitality on T-Mobile in that price range. http://reviews.cnet.com/smartphones/samsung-vitality-sch-r720/4505-6452_7-35015298.html

        • Anonymous

          well that’s the whole point of post vs pre paid. prepaid is more convenient and cheaper but you have a lower quality selection of phones. of course they will have better on contract prices for nicer phones. those plans cost more and they’ll make more money off you. if you really don’t have the budget for a nicer phone, the carriers are saying “touch luck”. 

        • but other carriers have nicer phones with no contract for that price range. I’m not asking for a Galaxy SII for $200 but I would think if they wanted to stay competitive in the pre-paid market, phones need just as much focus as the plans. No one is going to want your service if others have better phones and simular plans. I know someone who jumped to Virgin Mobile because of the better phones they offer and the awesome plan. Whats the point of offering 4g speeds for a budget plan when you aren’t offering budget phones to go along with it. I don’t see how they think people who are budget concise are going to want to spend $300+ on a phone.

        • Realcool2000

          Oh yeah…nicer phones like what? Go on and let us know what great phones there are that beat the tmo line up…and b sure to b specific. Then the comparisons will begin. Until then ur just talking without substance.

        • How about the one I listed a couple posts earlier? Samsung Vitality 800mhz 3.5in screen 320×480 res and Gingerbread all for $179. It runs silky smooth from what I’m seeing on youtube. Also they have two phones for $70 (one with Gingerbread the ZTE Score) with a 3.5in screen and 600mhz cpu’s. The only Android phones T-Mobile has for close to $100 are refurbs and they have 3.2in screens or smaller and have 600mhz or less for cpu’s. As I said I’m not looking for a beast in performance. I just want something in my price range that can get the job done and is a great value.

        • Realcool2000

          Sounds like u know ur stuff…u should go sign up with att or verizon

          …as I said b4, I’m super happy with my 3 phones for under $100.00 a month 1000 min talk… two have data ( 2gb and 200mb and both are 4g! ) the 3rd is unlmt text and shares the min…

          There’s no better deal on any other carrier

          Hope ur happy with veriazon and att havijng their way with you

        • I’m not knocking there plans. They offer cheap plans with great service. I’m just saying if they are looking to put a big focus on pre-paid they need to look at updating there line of pre-paid phones.

        • Anon

          I’ll be spending $600 on a phone and getting the $30 prepaid plan (‘unlimited’ data).

          Being thrifty does not mean you are poor, in many cases it’s just the opposite.

          The Galaxy Nexus is a pentaband GSM phone, meaning it can work on AT&T, T-Mobile, and the rest of the world. Regardless of whether T-Mobile or even AT&T sells the phone, the GSM international version will work fully.

          Since I’ll be on a prepaid plan, I wouldn’t get the contract price regardless, so it makes no difference to me.

          If the T-Mobile/AT&T merge happens, and my prepaid plan gets dropped, no big loss. I’ll just switch to an AT&T plan and life will go on. I won’t be happy about it, but… meh.

          The value is just obvious… 600 + (30×24) = $1320.

          Compare that to a contract AT&T or Verizon plan… 300 + (80×24) = $2200

          The $30 prepaid plan is just obviously high value no matter how you work it. I’m not particularly budget conscious, but I’m not going to pay double the cost for anything with no good reason.

        • Most people though can’t afford to throw $600 on a phone you know that right? Most people are living check by check right now. You are not most people. You are an adult who see’s a phone as something awesome while most people find them confusing and frustrating. You would gladly invest $600 into a phone cause you feel like you would get your moneys worth out of it while most people who are buying phones just want talk/text and some apps like Facebook/Twitter/Gmail. They will take snap shots of there lives with it but they could care less about 4g specs, megapixels, cpu speed or ram. They aren’t going to hack it. Would you give a kid a $600 phone? I have cousins (plural) that break or lose there phone on a consistent basis. If your a parent who are not rich are you going to give them a phone that will cost $600 to replace or $200? If you are a hard working guy who likes to party and play sports do you think they would get much worth out of a $600 phone? They are most likely going to buy a cheap $200 phone because they would rather spend it on other things that effect there life more. This is the majority of people in the US. Not all people are techies. Most don’t know the first thing about any of the stuff we do. That doesn’t make them dumb because we don’t know half the stuff they know about things they do. It’s just if T-Mobile wants a sucessful business they have to reach people who are non techies but still want a good value. That means offering a phone at a good price with all the features they need.

        • zps

          t-mobile has a 30 dollar prepaid plan???

        • Realcool2000

          Y’all r sucka’s I got 3 phones and pay under $100.00….on Tmo

        • Seganesjr

          They have the huawei comet that is an inexpensive touchscreen android froyo phone. I’ve bought it last november when my G1 got stolen and kept it when got my G1 back cause easily fits in pocket,has loud speaker and has portable hotspot.

        • The only comet they offer is refurbished now and still a 2.8in screen and 528hz cpu is not a great value when I can get a 3.5in screen with 600mhz cpu with gingerbread on cricket for $70 brand new.

    • 4g

      Email me @ ivorypeppers@gmail.com I may have the prepaid service your looking for

      • Ivorypeppers

        Ok added your email to lots of porn databases. Thanks

    • ItsMichaelNotMike

      Sorry, but you are being ridiculous. You complaint is that there are no T-Mobile superphones for $100 to $200. Do you feel the same way about cars, lamenting that a BMW does not cost $10,000? Do you expect to fly first class at coach prices? Do you want to stay in the president suite but pay an alley-view or room-by-the-ice-machine price?

      The general rule about anything and everything, the more money you pay, the better the product or service will be. If you don’t have more than $100 to spend for a phone, either go out and make more money or settle for what that $100 to $200 buys you.

      In any event, you must not be keeping up on phones.

      Metro PCS now sells the Samsung Galaxy Indulge for $200 (can be had on eBay for about $150). That’s a phone that EXCEEDS your expectations.

      And Metro PCS now sells the LG Esteem, a phone close to superphone specs (4.3″ display, 4GB internal storage, HDMI port, Android 2.3, 512MB RAM, etc.) After the $100 rebate it is only $249.

      If neither of those phones will please you, if you can’t afford them, or you don’t want to leave T-Mobile, then shelve your desires until you can work some overtime to save up for a nice T-Mobile phone.

      Sidenote: You need to think about the business side of things. Can you imagine the drain on high-end post-paid phone sales if T-Mobile made available its top phones to prepaid. There would be no incentive for people to sign a two year contract if one can get the same or similar phone on a prepaid account.

      • What are you talking about? I mentioned the Samsung Vitality below but I said above “Cricket (aka MetroPCS) has a few 3.5in screens for under $175” like the Samsung Vitality (Admire for Metro). This is a phone that would fit my needs perfectly in terms of performance and value. I never said superphone nor am I expecting one for under $200. I’m just expecting a similar value in phones if they want to compete with the other players. The lineup they have right now pales in comparison to the other service providers.

        • ItsMichaelNotMike

          Mark, I was responding to your statement seemingly saying you want a $300 to $400 phone/specs for $100 to $200. The phones within the price point you want to pay are worth exactly that, you can’t expect high spec phones for $200 or less.

          I do agree that T-Mobile needs to get some attractive $200 prepaid phones, such as the HTC Wildfire S.

          In T-Mobile’s defense, it is only in the last few months that prepaid have astounded us with great phones for $200 to $300.

          I expect that T-Mobile too will respond in kind with phone(s) similar to Metro PCS’s $250 LG Esteem, $200 Indulge, and other prepaids crop of respectable Android-based handsets costing $250 or less. (As I said elsewhere, the best thing about competition heating up in the prepaid world is that better handsets are debuting, literally every month.)

          You might want to wait to see if T-Mobile moves the HTC Wildfire to prepaid and lowers the price on doing so. (It retails for $250, more than you have in the budget). Note: Virgin Mobile prepaid now has the Wildfire S so T-Mobile should designate the Wildfire a prepaid handset.

          That phone would meet your needs and the price point could easily be $150 to $200 (unless T-Mobile wants to make money on phone sales instead of treating handsets as loss leaders to gain subscribers).


          (Of course, you could keep your eye out on eBay for the T-Mobile Wildfire S popping up for $150 to $200. Snap it up, insert a T-Mobile prepaid SIM and you are good to go, T-Mobile prepaid with a really nice handset. Why wait for T-Mobile to officially debut the prepaid handset that you want. All T-Mobile handsets with a SIM will work with its prepaid service.)

        • “Mark, I was responding to your statement seemingly saying you want a $300 to $400 phone/specs for $100 to $200”

          I’ve never made such statements. I said that T-Mobiles under $200 phones are no where near the value as there competitions sub $200 phones. I’m not saying I want phones better then Crickets phones at the same price. I’m saying I want what Cricket has on T-Mobile. I think the $200+ range will be too expensive for most consumers on a pre-paid plan. I think under $200 is the sweet spot and that is why Cricket has so many in that range. People don’t want to spend $300 up front on a phone. That is why most people are angry at Verizon and T-Mobile for releasing post paid phones at $300. People on a budget (like those who would go to a pre-paid service) are going to be even tighter on there wallets. Most consumers do not have the money to spend $200+ on a phone. If they did our country wouldn’t be in such a mess right now. T-Mobile is lucky I’m a customer right now. I don’t want to change my phone number so they have me on a string. I’m patient but if this keeps going on after the New Years I might switch.

        • ItsMichaelNotMike

          Mark, I said you were implying such with your statements.

          In any event, you are right on some things, mistaken on others.

          E.g., I too agree that $200 (and to $250) is the prepaid phone sweet spot. Even Metro PCS acknowledged last month at a conference that it was still trying to figure out just how much prepaid customers will pay for a phone, and not pay. The CEO was very concerned, with all the competition, that it could price its phones too high one month and in the next month thousands will choose to go elsewhere.

          He concluded that $300 is probably too much for a prepaid phone. (To be sure, Metro’s pricing seems to reflect this thinking. The Samsung Indulge debuted in early 2011 for $400. it is now $200 on Metro’s site. More significant, it just now debuted the LG Esteem, a phone clearly worth $400, for a paltry $250.)

          I disagree that most consumers don’t have $200 for a phone. What is more accurate is that consumers are now becoming unwilling to spend more than about $200 to $250 for a phone.

          And prepaid is NOT filled with only poor people or those down on their luck. Many middle class (who are now living payday to payday even more than they were before) are joining the prepaid ranks.

          A few of my friends who make $150K+ heard me talk about prepaid and are all moving to it. Fact is, in these tight times everyone wants to save money where they can. As I said before, gone are the days where people would not blink paying $2500 to $3500 for a phone and 24 months service.

    • Deeg

      i agree- they need some better phone choices.  Can someone please explain to me once and for all, don’t you need a 4g phone to access the Tmobile 4g network???  Thats what I thought so wouldn’t those 3g phones not be able to access the monthly 4g – they can access monthly 3g

      • Mihero222

        Hello Avi, here you go… All of T-Mobile’s 3G phones WILL work on their enhanced 3G network that they refer to as 4G or 4G Monthly in advertising.  T-Mobile doesn’t have enough spectrum and/or capital(money) to build out a new true-4G network. So what they decided to do to compete with the other carriers is enhance their 3G or HSPA data network to HSPA+.  By upgrading their towers to HSPA+(added the plus), they are able to provide their customers a much faster network speed comparable to the current 4G network speeds that the other national carriers are offering without really having a 4G network at all.  Older 2G handsets will work on a 4G network also, and you won’t notice any difference for calls or texting, but will not be able to use 4G speeds for data because the 2G handsets won’t have the frequency needed and therefore will be very slow and painful.  Like using an iPhone on T-Mobile, works fine for calling and texting, but TMo & AT&T use a different frequency for 3G / 4G.

        • Deeg

          you confused me more…so are 4g phones 4g speed?  i went to walmart and tmobile has a problem cuz none of the employees no anything about how tmobile works…email mike dot katz at magenta = he’s head of prepaid

    • T-Mobile must of herd me (I am really smart and awesome you know) cause they just announced the phone I’m looking for. Exhibit II 4g for the win.

  • BP

    “T-Mobile’s fight now begins to focus on prepaid carriers like MetroPCS, Leap, Cricket and Boost Mobile.”T-Mobile has went from heavyweight to featherweight.  This is what a slow death feels/looks like.

    • Droidsoup

      Metro PCS uses the AWS network like T-mobile.  So, if T-mobile bought Metro PCS then it would make some sense.  But they would have to look at creating a CDMA/WCDMA phone much like the other carriers have done.  MetroPCS has a big following and for T-mobile to catch some of that not a bad Idea.  But T-mobile owners want to kick it loose to get the promised 8% market share profits of the newly merged AT&T.

  • Deeg

    They keep advertising Monthly 4G but the phones they’re selling on their prepaid website and at retail (except for maybe one model) are all 3G phones so theres a disconnect there.  Also, I think more and more customers are going to think twice because they don’t know what will happen to Tmobile in the future – esp with rumors that prepaid may go to MetroPCS.  Does a customer want to  buy a new phone to use on Tmobile Prepaid when that phone may not even be usable in a year?  And there’s no guarantee any of these plans and prices will stay in effect if the merger does go through.  Its a catch 22.

    • guest

      That’s why they are not in contract…why not target those customers right now while they can make a little money. If they don’t like the service if they get passed on to metroPCS, they can leave whenever they want.

    • Anonymous

      sorry, but every single t-mobile phone is available for monthly 4g. you even get a discount on the galaxy s 4g when you buy it with a $50 epin. $319 is not bad for a Galaxy S 4g.

      • Deeg

        Are you saying 3g phones can access the 4g network…I thought you needed a 4g phone to get 4g speeds.

  • All I can say is as Business Man.  The Even More Plus Plan is the “Bomb” No Contract, lowest Monthly Rate + Section 179 Tax Write Off for the Phone Purchase that year – even if you opted to pay the 19th month interest free installments.

    • ItsMichaelNotMike

      Before I closed my 20-lawyer firm (in 2005, Doc said I would suffer an early death if I kept it open) one of the BIGGEST pleasures I had in business was writing off all the phones I was buying. I was getting a new phone every two months or so. Of course I was doing the same thing with computers and cars.

      I understand your pleasure Derrick. ;)

      • zps

        how does one qualify to deduct this amount?  do you have to be a business owner, not an employee?

  • ItsMichaelNotMike

    All this analysis and conjecture is way off. It is quite simple actually. As I keep saying, prepaid is the way of the future, post paid days are numbered, as well as the subsidized phone. (Because of the tanked economy people are waking up and smelling the coffee. They have stopped to add up just how much it is really costing them to get a $300 discount on a phone. Basically, the average user is paying up to $70 ADDITIONAL each month to get that discount. $1680 to save $300, that’s one heck of an interest rate carriers don’t want customers to figure out.)

    As far as T-Mobile, regardless of what happens with the acquisition it does not want to repeat the mistakes it made with jumping on to data and 3G.

    Some of the bonehead racists in here call prepaid handsets “ghetto phones” and insult prepaid users or anyone talking positive about where prepaid is going (I have a screen capture of one such id-i-ot, who asked what happened in my personal life that I had to go to prepaid).

    Despite the lack of vision by those willing to pay $1700 extra so they can feel good about themselves and show off to others (who nowadays don’t know one phone from the other) the carriers see where things are going. The smart carriers are migrating to prepaid now, so when post-paid implodes they are ready to go on the new business model. E.g. smart carrier: Sprint who bought Boost Mobile and Virgin Mobile, two prepaid companies.

    Meanwhile, the carriers who lack vision are riding the post-paid train until it derails off the bridge and explodes into the canyon below.

    Sidenote: I would think people with common sense would cheer the industry changing to prepaid. What’s the two things that will dramatically improve with prepaid… that’s right, customer service and pricing. Prepaid carriers know that if they piss you off you can cancel your contract and switch carriers instantly. And people will move because of pricing too. Eventually, prepaids will lower their prices to where someone stays because the price is too good to leave and that’s what will keep one with a carrier, not because one is chained to a 24 month contract and the threat of ETF penalties.

    • Anonymous

      You simply can’t be clearer enough. +1

    • Anonymous

      I have to partially disagree with you on this.  Yes i do agree that it would be better for customers, but i’m doubtful that a carrier would (not “could”) provide quality service with such a huge cut in revenues.  Also take into consideration our spectrum crisis and you have yourself one big pickle to deal with.  The cost to provide such great quality service comes with comfort in your revenue stream, and there needs to be a form of guarantee that the revenue will come in to support this.  This is why i feel that the postpaid system won’t “derail” as you put it. Unfortunately, the “ghetto” phones are considered to be of such poor quality is mainly because there is less money to be made off of it therefore less incentive to invest more into them (Profit IN> profit lost to expenses). 

       I like your idea with respect to how they benefit the individuals, but i’m not sure if you really are relating the business perspective very well (or the very successful business perspective like AT&T or Verizon’s) to your argument.  Your way of putting this reminds me of a friend of mine who is a manager at an T-mobile store here in Boston.  He often tries to convince me that prepaid is the wave of the the very near future, and i always counter with T-mobiles attempts at such a business strategy and how t-mobile seems to simply be treading water against the river current.  Churn is always high with them, they need to find a better way of making customers “stick” to them instead of just “sticking together”Aside from the unfair stigma around prepaid, its just not as profitable as guaranteed hard cash every month.  Also its much easier on accounting :-)

  • ItsMichaelNotMike

    Those of you who do not think the economy is driving this post-paid to prepaid exodus, think again.

    A few months back a national study revealed that 80% of Americans could NOT come up with $2,000 in 30 days to pay for an unforeseen emergency, even after borrowing from friends and family.

    When the news covered Obama’s new plan to assist homeowners in refinancing their homes, at a lower interest rate, the national news revealed that 90% of Americans have missed at least one house payment in the last year, meaning their credit was not perfect.

    People are so afraid nowadays they are cutting up their credit cards. Instead they are flocking to (cover your ears, I am going to say the P word) getting prepaid cards, where your spending limit is determined by how much money you have loaded on to the card.

    American Express is even getting into the act, before it is too late and they have to close the credit arm of the business.


    OMG, a prepaid phone and prepaid charge cards! What is America coming to?

    What’s next, prepaid se#x? Oh wait, they have that already… never mind.

  • Deeg

    Virgin today finally issues a new b ether quality phone for their paylo plans. This month I tried the $30 prepaid plan since I have an old Tmobile phone – You get a combo of 1500 min/text with 30mb data ,but Virgin (and straight talk) are better values…Virgin gives you the same 30mb of data on Sprint but gives you 1500 minutes AND 1500 texts…Good for people who don’t need a lot of data/web…and great for kids who text a lot.

    • Droidsoup

      What about Cricket that is showing up more often now even at Best B.  Phones are a bit pricey when compared to Metro P.  But Cricket is on Sprint network.  I have been a long time T-mobile customer. 

      • Deeg

        Last time I checked Cricket isn’t available nationwide; it wasn’t available in my area

  • Anonymous

    What I don’t understand is T-Mo’s awkward approach to silently releasing the $30 plan for competitive reasons yet expect people to flock in? What about NOT restricting current customer transfers to the new plan? This is simply a way to gain customers but not stay loyal to current ones. All in all, T-Mo and Virgin offer the best plans for now. Simple Mobile is nowhere near competitive especially with there biased claimed 4G speeds at $40, let alone Boost’s pathetic “on-time payments” in order to reach a lower price.

    • Droidsoup

      If you read the Simple Mobile it says the $40 plan is unlimited talk, text and data at 3G speed not the 4G speed to get that you have to jump to the $60 plan.  I am thinking about them but I just think that there is some data cap some where.