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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.

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  2. I read that this service uses VZW network.

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  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.

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    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.

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  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

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  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.

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

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

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  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.

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  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.

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  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?

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  11. I have a straight Talk phone and I can really recommend it, I have the unlimited plan and I love never having to worry about the bill being more than I thought. The coverage on Verizon’s network is truly superior to my old contract “S” and I have been able to make calls from everywhere I’ve been so far so don’t worry about roaming because it really is nationwide.

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  12. [...] Prepaid mobile service providers in the U.S. that are watching their margins get whittled away by brutal price wars should look across the pond to O2. The UK operator today released some impressive stats regarding [...]

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  13. Tracfone uses lots of different carrier networks depending on the phone you have. You might want to check for coverage on http://deadcellzones.com first.

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  14. @Tatum Hawkins, this is the second article on Straight Talk that I read your rant on. I’m sure it’s actually word for word the same as well. We call that spamming.
    But I do sympathize with you. It seems you are trying to fight fires here. Sadly, the Straight Talk plan on the Verizon network is far better than Boost, on Sprint’s network. I know this because I actually used Boost before. And now I use ST. Gone are the days of dropped calls, delayed texts and spotty reception.

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  15. I couldn’t agree more, boost mobile does not compare. With boost i didn’t get near the reception i accrue currently with straight talk. With Straight talk I literally pay less and get more anyone using a straight talk competitor more then likely has no idea what they are missing out on.

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  16. Boost is not very good. I’ve trued them and I know,

    Straight Talk is really good. Strong signal and great coverage. No dropped calls.

    The best thing about Straight Talk is its simplicity. I am so tired of wading through funky phone bills with mysterious charges and fees.

    I really appreciate the savings, of course, but not having those awful and undecipherable bills has been a great stress-reducer.

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  17. [...] to the iPhone — and $13.65 in revenue, up 8 percent over the year-ago period. Meanwhile, the increasingly heated prepaid space took its toll on Leap Wireless and MetroPCS, as both service providers saw customer growth slide in [...]

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  18. 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.

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  19. I’m very happy with Straight Talk and am impressed with their coverage on Verizon.

    To me, the $30 – 1,000 minutes, 1,000 texts deal is unbeatable. I travel and have never had a problem.

    When I had Metro POS, it worked fine in town but as soon as I got outside the city, fuhgeddaboutit!

    You get what you pay for, on in the case of Straight Talk, MORE than you pay for!

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  20. [...] more from  gigaom here.SHARETHIS.addEntry({ title: "Gigaom trumps up prepaid again", url: [...]

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  21. [...] Your Early Termination Fee By Colin Gibbs Dec. 17, 2009, 12:16pm No Comments 0 0 0 0 The ultra-competitive prepaid market is producing some astoundingly inexpensive all-you-can eat rate plans. And breaking your cell phone [...]

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  22. Walmart has really impressed me with launching StraightTalk nationwide. I love this prepaid plan, $45 for unlimited texts/calls, its perfect for my daughter and I. I get great coverage since it is on the Verizon network which is perfect for when I go out of town and need to stay connected with her. I reccommend this plan to anyone trying to save money and be economical :)

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  23. I ABSOLUTELY LOVE STRAIGHT TALK. I have had no problems whatsoever. My Samsung Finesse phone is the greatest and its just unreal that I only spend 45 dollars a month! I used to spend over a hundred dollars and with times like these… any money saving IS fantastic. Straight Talk is wonderful all around. Great service, great function, great price, and great customer service! Couldn’t say enough good things! It is on the Verizon network and we all know that Verizon has the best coverage and service. I got it at Walmart and even picked up one for a present for my mom so she could save money!

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  24. [...] carriers enjoyed their view from the throne. Users continued to move toward prepaid thanks to an ultra-competitive prepaid market that encourages users to switch providers at the drop of a hat. Leap, MetroPCS, T-Mobile USA and [...]

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  25. Take a look at Zoom Mobile.

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