26 Comments

Summary:

The cutthroat prepaid market will get even more competitive this weekend when Wal-Mart begins offering no-contract plans at bargain-basement rates. The planet’s largest retailer said it will roll out TracFone Wireless’ Straight Talk, which offers a $30-a-month plan as well as a $45 monthly rate that […]

wal-martThe cutthroat prepaid market will get even more competitive this weekend when Wal-Mart begins offering no-contract plans at bargain-basement rates. The planet’s largest retailer said it will roll out TracFone Wireless’ Straight Talk, which offers a $30-a-month plan as well as a $45 monthly rate that includes unlimited text messaging and mobile web access. 

But the big question in the prepaid segment is just how cheap plans can be and still be profitable — particularly when it comes to delivering data. Text messaging doesn’t command nearly as much bandwidth as other data applications, and TracFone’s antiquated lineup of phones surely limits its customers’ use of the mobile web, which can weigh down the network.

The recession has sparked a surge of consumer uptake of cut-rate prepaid services (GigaOM Pro, sub. required), and service providers such as MetroPCS and Leap Wireless have engaged in brutal price wars to increase their share of the growing market. (Prepaid has become so attractive, in fact, that Stacey has taken the plunge.) Sprint is hoping to join the mix, too, with its $483 million acquisition of Virgin Mobile USA. Wal-Mart’s move could up the ante in two key ways: Not only do the price points undercut most competitors’ offerings, the chain will sell Straight Talk at more than 3,200 stores nationwide.

But as the race to the bottom approaches the finish line, the prepaid guys will have to choose between offering older handsets that aren’t optimized for data consumption or surrendering in the prepaid price war. I’m sure plenty of users don’t mind phones with limited memory and shoddy mobile browsers — in fact, some of my friends are very happy with those kinds of devices — but offers of “unlimited mobile web access” won’t be nearly as compelling when they’re packaged with dated handsets.

  1. will it be possible to activate straight talk on a second hand handset flashed from sprint or verizon? this dominates the high end phones on metroPCS and Cricket. it is also the key to getting the mix of a really cool phone and cheap unlimited data.

    Share
  2. I read that this service uses VZW network.

    Share
  3. Hey there, it’s Tatum Hawkins from Boost Mobile. Straight Talk may be expanding with Wal-Mart nationwide, but we’re already available at nearly 20,000 retail locations throughout the U.S. including Wal-Mart, RadioShack, Best Buy, Target, and independent wireless dealers. AND, next Monday, we’re expanding into additional Wal-Mart stores bringing our products to almost 3,000 Wal-Marts nationwide.

    Boost Mobile, who started the trend of affordable, nationwide, all-inclusive wireless plans with our $50/month no fees unlimited offer, also enjoys the benefit of being an established wireless carrier since 2002, we’re no MVNO! And we’re a recognizable brand that people like and trust. We have a broader handset selection and the fastest nationwide walkie-talkie capabilites.

    Also noteworthy is that Straight Talk doesn’t have access to all of Verizon’s assets, like roaming agreements that would give them the same nationwide coverage as the postpaid offer. Boost Mobile is available nationwide in more than 17,500 cities reaching over 274M pops.

    Share
    1. I have used t-mobile for about 2 years. Then I have moved to nextel. Used them for about 3 years. Well Boostmobile came out with the 50 dollar unlimited plan. I switched. We all know that nextel has poor service area. We all know that texting sucks. We all know that if you are using Boostmobile, your call will be dropped, your internet will come up with an error and most of all. If your texting, you have to wait 5 min. for it to download. (sometimes it takes days to come threw) I realize it is prepaid, but come on boostmobile, lets spend some of that profit to improve your network. If YOU don’t take care of your costumers, someone else will. Well here is “straight talk” taking care of boostmobile’s costumers.

      Share
  4. This will be nice. Now more Libs will be able to have cell phones while they get Obama’s free welfare healthcare at taxpayer expense

    Share
  5. If you are voice *and* data heavy, pick a cheap pre-paid with a phone with decent voice quality, then get a Verizon MiFi for all your data needs (notetbook, netbook, iPod Touch, aso.). Together, it’ll cost you less than $100/month.

    Share
  6. We need more info, please. Long distance? Roaming? Can the SIM be popped into a different phone and used?

    Share
  7. [...] Read more from gigaom here. [...]

    Share
  8. Straight Talk functions on Straight Talk handsets, so there’s no sim popping. But the array of phones offered should satisfy most needs.

    Roaming isn’t necessary as the coverage is nationwide. Check the map at: http://straighttalk.com/Coverage

    And Boost is a brand of Sprint, so make of that what you will.

    Share
  9. Thanks for covering for me, StraightTalkMe. =) Correct, Straight Talk uses VZW’s network, so CDMA handsets, no sim popping. No international roaming or long distance, but domestic long distance is included and coverage is nationwide.

    Share
  10. I’m very interested in Straight Talk which will become available here in the next few days. But I need to zoom in on their coverage map to be sure my area will have service. Any ideas how to get more detailed info re: map coverage?

    Share

Comments have been disabled for this post