In A Down Economy, Prepaid Wireless Grows - InformationWeek

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2/27/2009
06:52 PM
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In A Down Economy, Prepaid Wireless Grows

Leap Wireless and MetroPCS are picking up multiple subscribers as consumers look to trim costs.

Cost-conscious customers are showing that they aren't willing to give up their cell phone service, and prepaid providers like Leap Wireless and MetroPCS appear to be benefiting.

Unlike mobile virtual network operators like Virgin Mobile and Helio, Leap and MetroPCS are full-fledged carriers who own their own spectrum. The companies offer unlimited voice and text plans for about $40 a month with no credit checks or long-term contracts. Both carriers have seen a steady uptick in their number of subscribers in the fourth quarter.

By adding 519,000 new customers, MetroPCS had its best quarterly subscriber growth in history. Overall, the company was able to add 1.2 million new subscribers in 2008, the third consecutive year the operator added more than a million new customers.

"While the U.S. economy experienced continued unprecedented economic disruption throughout 2008, we focused on superior execution, on increasing brand awareness, and on building out our new markets and launching service in Philadelphia and Las Vegas," MetroPCS CEO Roger Linquist said in a statement. "As a result of our efforts and focus, I am pleased to report that we met and/or exceeded our 2008 guidance which we first issued in November 2007 and reiterated over the course of 2008."

Leap, which is the parent company of Cricket and Jump Mobile, added 385,000 new customers for the fourth quarter and nearly a million for 2008. The company is also seeing increased revenue and adoption rates for its prepaid wireless broadband service.

The companies flirted with a merger two years ago, but instead signed a roaming deal that would enable the carriers to offer some service on each other's networks. When both companies build out their respective networks, it could essentially amount to a fifth national carrier.

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