Users Shun Prepaid Carriers
MetroPCS Communications Inc. and Leap Wireless International Inc. reported an abrupt slowdown in customer growth during what is traditionally their strongest quarter, raising concerns the sputtering U.S. economy is forcing more consumers to eschew prepaid wireless service or seek even cheaper options.
The trend follows a more aggressive push by larger carriers, such as Sprint Nextel Corp. and T-Mobile USA, to capture users at the lowest end of the market, by such means as free phone offerings to those on government subsidies. Investors sent shares of MetroPCS and Leap sharply lower on Thursday.