May 06, 2010
Sprint's Prepaid Multi-Brand Strategy Focuses on Distinct Customer Segments
WARREN, N.J., May 06, 2010 (BUSINESS WIRE) --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."1
"With almost 60 million people now on prepaid service2," 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(R) 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 Nielsen3 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.
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 taxes4]:
For the first time, Virgin Mobile customers can add Blackberry(R) 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."
Virgin Mobile's new handset lineup proves that a two-year contract isn't necessary to get a hot data-driven device:
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.
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 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 voice6, 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(TM) and, from Sanyo by Kyocera, the Incognito(TM), Mirro(TM) SCP3810 and Juno(TM) 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.
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.7
"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.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two wireless networks serving more than 48 million customers at the end of the fourth quarter of 2009 and the first and only 4G service from a national carrier in the United States; industry-leading mobile data services; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. The company's customer-focused strategy has led to improved first call resolution and customer care satisfaction scores. For more information, visit www.sprint.com.
1 From Sprint Corporate Research, 2009.5 Market Profile, December 2009
2 New Millennium Research Council, March 2010
3 Nielsen Customer Value Metrics analyzes the wireless service bills of more than 65,000 postpaid wireless subscribers. Stated numbers represent averages for voice, text and data usage on subscriber bills during the time period.
4 Some point of sale taxes may apply.
5 Handset prices exclude taxes.
6 Morgan Stanley Telecom Services 2/2010.
7 Q4 2009 Nielsen Prepaid report.
Sprint Corinne Nosal, 908-607-4235 Corinne.firstname.lastname@example.org