Sprint gets super serious about the prepaid mobile market

Some huge news this evening in the world of prepaid mobiles as Sprint has announced its new strategies for Boost Mobile and Virgin Mobile. With some 60 million Americans using prepaid mobiles, Sprint feels the time is right to make an all-out assault on the market. Said Sprint’s Dan Schulman: “This is the year that prepaid moves to the forefront of the wireless industry. In the first quarter of 2010, more than half of the mobile gross additions in the U.S. selected prepaid, and we predict that approximately 70% of the net adds in 2010 will choose plans without a contract,” adding that “the no-contract market has clearly moved beyond the credit-challenged and lower income segments.” Here’s what’s in the pipeline.

As of May 12th, Virgin Mobile will begin offering Beyond Talk plans. Ranging from $25 to $60 per month, each plan includes unlimited SMS/MMS, email, data and web. The $25 plan includes 300 minutes, the $40 plan 1,200 minutes and the $60 plan has unlimited minutes. Throw in an extra $10 per month and you’ll be able to hook a BlackBerry up to BIS. Yes, you read that right. $35 for a BlackBerry with unlimited data. If you’re a bit puzzled as to why Virgin is more focused on data and texts over voice minutes, the reason is simple: the amount of voice minutes used by young adults continues to plummet as email, IM and SMS grows at a rate of 150% during the years 2007 to 2009. Factor in 1800% growth in mobile data in this segment and it’s pretty obvious Virgin is one of the few companies that actually caters to the demands of its customers. This brings us to its new handsets. Virgin Mobile will be bringing the LG Rumor Touch and Rumor 2 ($149.99 and $89.99, both only available off contract), and Kyocera Loft ($69.99) into the fold with the BlackBerry Curve 8530 launching at the end of May with a retail price of $299.99.

As for Boost, not much is new in terms of plans (keep in mind it just announced that unlimited calls to 411, email and IM were recently added to its $50 unlimited plan which also includes all the talking, texting and web you wish), but now we know for sure that it will soon be carrying the Samsung Rant and Kyocera Incognito, Mirror and Juno.

Hit up the jump to check out the press release.

SPRINT’S PREPAID MULTI-BRAND STRATEGY

FOCUSES ON DISTINCT CUSTOMER SEGMENTS

Differentiated Brands Old & New Aim to Serve

Increasingly Diverse Audiences, Tackle Specific Competitors

WARREN, N.J. – May 6, 2010 – Sprint [NYSE:S] today officially unveiled its comprehensive multi-segment approach to the prepaid wireless marketplace. Since Sprint’s acquisition of Virgin Mobile USA, Inc., the company has rolled out a series of new prepaid products, enhancements and industry-advancing products, each designed to appeal to specific customers in the wireless space.

“We brought together the resources and experience of the Boost and Virgin Mobile teams in late 2009,” said Sprint CEO Dan Hesse.  “Since that time, we have been developing the critical pieces of our multi-brand prepaid strategy.  Our approach to the prepaid market can truly set us apart from the competition with tailored offers that will address specific needs in this growing market.”

“This is the year that prepaid moves to the forefront of the wireless industry,” said Dan Schulman, president of Sprint’s prepaid group.  “In the first quarter of 2010, more than half of the mobile gross additions in the U.S. selected prepaid, and we predict that approximately 70% of the net adds in 2010 will choose plans without a contract.”

“With almost 60 million people now on prepaid service,” Schulman continued, “the no-contract market has clearly moved beyond the credit-challenged and lower income segments.  The prepaid market has changed dramatically, with customers across multiple demographics and lifestyles demanding a wide variety of handsets, features, and plans tailored to their specific needs and wants.”

Sprint’s prepaid portfolio will initially be driven by four brands, with each focused on a specific audience.  “The launch of this portfolio goes far beyond changing prices,” explained Schulman.  “We are introducing innovative and attractive offers for specific groups of customers based on usage and habits – from those who are on limited budgets and use their phones infrequently to those who want high-end devices to use for all their communications, entertainment and social networking.”

Virgin Mobile USA

Reinventing prepaid wireless once again, Virgin Mobile will introduce an innovative new value proposition that focuses on serving customers who use text and data services to power constant connection with their social networks.

With unlimited messaging, email, data and web included on all plans starting at just $25 a month and a new high-end handset lineup, Virgin Mobile will offer a clear alternative for customers who want a data-driven service without expensive annual contracts and thousands of unnecessary voice minutes. With the addition of the lowest-priced BlackBerry® service plan in the market, Virgin Mobile will provide real value for individuals looking to stay connected without compromising on handset or service quality.

The way youth and young adults communicate has changed dramatically over the past few years.  Data from Nielsen shows that usage patterns for postpaid mobile subscribers aged 18-34 shifted from 2007 to 2009.  Minutes of talk dropped over 10% while messages sent and received grew by more than 150%.  The amount of data usage within this group grew by over 1800% during the same time period.

Beyond Talk™

On May 12, Virgin Mobile will unveil three new “Beyond Talk” plans that all include unlimited messaging, email, data and web [with no incremental fees or taxes]:

• The revolutionary $25 plan is the industry’s lowest price point for unlimited messaging, email, data and web with 300 minutes of voice per month, ideal for high-end device users seeking an unbeatable price to enable the text and data services they need.
• The $40 plan includes unlimited messaging, email, data and web with 1,200 minutes of voice per month — the perfect value for those seeking an affordable plan with everything they need.
• The $60 plan includes unlimited messaging, email, data and web with unlimited voice to offer great value for high-end smartphone users expecting an unlimited plan to cost much more.

For the first time, Virgin Mobile customers can add Blackberry® data service to any of these plans for just $10 more, enabling an unprecedented $35 plan consisting of both voice calling and Blackberry data service.

“Our new offers target a continuing evolution in wireless consumer behavior – increased use of text and data services as a form of wireless communication over talk,” explained Schulman.  “These Beyond Talk plans offer the most accessible solution for customers seeking that data-driven lifestyle — unlimited text and data on their terms without a contract, at prices they will love, without requiring them to buy extra minutes they don’t need.”

New Handsets

Virgin Mobile’s new handset lineup proves that a two-year contract isn’t necessary to get a hot data-driven device:

• The Blackberry Curve™ 8530 smartphone is a particularly desirable device without a contract.  Key features include an approachable form factor, full-QWERTY keyboard, optical track pad, Wi-Fi connectivity, dedicated media keys, and 2 MP camera.  The Blackberry Curve 8530 smartphone will be available for $299.99 at retail and at http://www.virginmobileusa.om at the end of May.

• The LG Rumor Touch™ at $149.99 is the first full touch interface handset from Virgin Mobile and is only available without a contract on these plans. Customers can use all the data they want and message all of their friends easily and simply with a Beyond Talk plan. This handset is ideal for the super-connected with an external memory drive that can store up to 16GB of data.

• The very popular LG Rumor 2™ QWERTY launched last year, also only available without a contract from Virgin Mobile.  For $89.99, it allows customers to message quickly and easily with preloaded apps like the Ultimate Inbox, threaded messaging and Connect social networking. The popular Opera Mini web browser is included as well.

• The Kyocera Loft QWERTY for $69.99 suits message-savvy customers perfectly with an embedded instant messaging and email application, and message threading for SMS and MMS in a single inbox. The camera phone includes the networking features mentioned above as well as a Google Maps and other navigational applications.

Virgin Mobile USA continues to serve its current base of prepaid customers with a wide range of handsets, monthly unlimited plans, Minute Packs, Texters Delight and Broadband2Go.

Broadband

Broadband2Go, launched last year under the Virgin Mobile label, also targets the needs of the high data-using crowd that wants easy wireless Internet access wherever they are but doesn’t want to sign a long-term contract.

“Since we expanded distribution, lowered the price, and added more data capacity without changing prices, sales have tripled,” said Schulman.  “We’ll continue to enhance this product line as well, possibly under multiple brands to include new services and the very latest in high speed networks, including 4G where available.”

Broadband2Go operates on Sprint’s Nationwide Network, unlike other prepaid broadband offers.

Boost Mobile

Boost Mobile continues its popularity by focusing on consumers who love to talk and text and stay connected with the best value and straightforward monthly unlimited pricing.  With more than 25% of U.S households now wireless-only for voice, Boost offers value and service that is second to none.  This week, Boost added unlimited 411 calls, email and instant messaging to its $50 Monthly Unlimited plan, which also features unlimited talk, text and web access.

Boost’s ever-increasing suite of CDMA handsets, introduced in late January, is driving significant consumer demand.  The Blackberry Curve 8830 smartphone, launched earlier this year, is joined by the Samsung Rant™ and, from Sanyo by Kyocera, the Incognito™, Mirro™ SCP3810 and Juno™ on the CDMA side.  Depending on a customer’s choice of features, Boost Mobile also is available on the Nextel National Network for push-to-talk technology.

Assurance Wireless

First launched late last year, Assurance Wireless is a free wireless service developed specifically for the 37 million eligible low-income households who need it most. Qualifying customers – often cash-constrained individuals eligible for government- assistance programs like Supplemental Nutrition Assistance Program (SNAP, or food stamps) – receive a free cell phone and 200 free minutes of airtime for local and long-distance calling every month.

Sprint is “proud to offer this valuable program,” according to Schulman, which is currently available in Michigan, New York, North Carolina, Tennessee and Virginia and will continue to expand as individual states approve the program. To date, hundreds of thousands have signed up for this uniquely tailored offer.  Sprint anticipates that Assurance Wireless will be available in approximately 25 states by the end of 2010.

A New Pay By the Minute Brand

During Sprint’s first quarter earnings call, reference was made to another new brand to launch this month targeting budget-conscious customers who spend less than $30 per month and are focused on the value they pay per minute.  Roughly 63% of the no-contract market chooses to pay by the minute or by the day.

“There are millions of people who don’t want or can’t afford smartphones and expensive data plans,” said Schulman.  “This is the traditional no-frills prepaid customer base.  For these ‘basic communicators,’ we are creating a fresh brand with industry-leading value and consumer-friendly offers.”  Designed to resonate directly with cost-conscious consumers, this new brand is expected to initially debut at retail in approximately 16 markets.