Phone Rivals Dial Up Prepaid Services
The big U.S. wireless carriers–risking profits for growth–are moving more aggressively into the low end of the cellphone market: Selling services to consumers without requiring them to sign contracts.
Sprint Nextel Corp. (S) is rolling out new brands and plans, including a partnership with Wal-Mart Stores Inc. (WMT) announced Thursday that will charge seven cents per minute or text message–about half as much as TracFone Wireless, the largest U.S. prepaid provider.
Verizon Wireless, (VZ) which had largely avoided the prepaid market, has opened its nationwide network to prepaid resellers. In the first quarter, Verizon accounted for nearly half of the industry’s prepaid subscriber additions.
The entry of larger carriers into prepaid service has pressured smaller players like MetroPCS Communications Inc. (PCS) and Leap Wireless International Inc., (LEAP) which combined have 12.4 million customers, to slash prices and explore a merger.