Analyst: TracFone's Straight Talk to launch smartphone via T-Mobile's HSPA+ network
TracFone's Straight Talk service will soon launch a high-end Android smartphone running on T-Mobile USA's HSPA+ network, according to an analyst, a move that would break Sprint Nextel's (NYSE:S) hold as the provider of service for Straight Talk Android phones.
According to BTIG analyst Walter Piecyk, Straight Talk will launch the LG Optimus 2X later this month and it will support T-Mobile's HSPA+ network, marketed as "4G." Piecyk did not provide a price for the phone but wrote in a blog post that he expected TracFone to sell it for at least $300. He also wrote that the phone likely will go on sale online before hitting Walmart stores, where other Straight Talk products are sold.
"The expansion to T-Mobile this soon after first launching with Sprint is impressive and should enable Straight Talk to be even more competitive in prepaid in 2012 by expanding its phone lineup to GSM and 4G, lowering the handset costs and providing the company with at least two service providers that can ensure that América Móvil obtains the best pricing on usage," he wrote.
A T-Mobile spokeswoman declined to comment.
T-Mobile has been offering its network to TracFone's Straight Talk service on an MVNO basis since August 2010. Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) also power Straight Talk feature phones. However, Sprint last fall became the exclusive provider of service for Straight Talk's Android smartphones. Straight Talk currently sells two Android smartphones.
"Sprint is currently a wholesale provider of service for TracFone's Straight Talk Android service," Sprint spokesman John Votava told FierceWireless, adding that there has been no change to the companies' relationship. He declined to comment on whether T-Mobile had taken away Sprint's exclusive Straight Talk Android relationship or if Straight Talk will launch more Android phones running on Sprint's CDMA network.
Piecyk wrote that T-Mobile's "willingness to cut this deal also likely reflects a more aggressive approach by that company since the end of the AT&T deal." However, he left open the possibility of TracFone turning to the nation's larger carriers for Android service. "América Móvil uses all the major carriers for its feature phones but a more complex data wholesale agreement is likely required to offer service on bandwidth hungry smartphones," he wrote. "América Móvil is fortunate that Sprint and T-Mobile's struggles appeared to enable them to sign a data wholesale agreement with these companies. We do not rule out Straight Talk offering smartphones on Verizon and AT&T's network in the future."
- see this BTIG blog post (reg. req.)
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