How low can unlimited pricing go?

Fine article, Sue.

One clarification: Straight Talk's Unlimited plan is ALREADY AVAILABLE at participating Walmart locations, from Walmart's online Straight Talk store here: walmartDOTcom/catalog/product.do?product_id=11604093 and at straighttalkDOTcom

Thanks for the clarification. I will update the article. -- Sue

Costs could go lower if you replace customer service representatives with technology. Currently, you can do everything you need to use the Boost service, including equipment changes and upgrades on the website. There is no need to contact customer service unless you have signal problems.

Carriers will be forced into unlimited coverage plans as they begin to roll out femtocells. Almost 30% of carrier monthly costs are related to tracking and provisioning minutes.

I believe anything at or under $50 is the same price point. I originally was hoping the big carriers, TMobile, Sprint, etc. would come in at $59.99 and the others in the $45-$50 range. The pre-pays are there. We just need the larger carriers to come in now.

As mentioned, to the consumer, I would believe a $50 plan or a $45 plan would register as the same...

Straight Talk while available at selected Wal-Marts is hardly a national effort thought perhaps having availability online counts as "national." The fact is that Straight Talk is in limited Leap and Metro markets and not even all Wal-Marts but "selected" ones. This suggests that the Straight Talk plans may only be in a trial state. Besides, all those wholesale minutes on the VZW network may potentially mess up the Most Reliable Network for the higher-ARPU VZW subs.

TracFone doesn't do marketing. They'll need some bigger push beyond viral marketing and increased distribution outside of Wal-Mart to get substantial customer traction. If they do so then that increases their CPGA which pressures their margins.

It's not a war yet.

$45 is bottom? then what about cricket and pocket wireless who only charges $25 per month. granted their coverage tends to be small and local, though cricket can offer more area

Why would I as a customer want to pay extra for my cell phone so that my provider can spend it on advertising, how does that give me any better service? I prefer to spend my money with Tracfone knowing that they are giving me the best prices and not hiking up the price so that they can win more customers.

I think this is the first time that I have ever seen Sprint's customer service system considered an advantage.

SarahCraig said:

"I prefer to spend my money with Tracfone knowing that they are giving me the best prices and not hiking up the price so that they can win more customers."

Did you even read that before you wrote it? Because if you did you'd realize how illogical it sounds. Carriers don't raise rates to win customers; they raise rates because of the cost of providing said services. Of all of the offerings in cell provider land, SMS and voice calling are the cheapest to offer, but data is quite expensive. It's the reason T-mobile can give you so many minutes yet no carrier has a truly inexpensive data solution. High rates do NOT attract subscribers; if that were the case everyone would go to Verizon.

Those plans are voice-only. I was referring to plans with text messaging and data services too.

With NET10 it's impossible to get anyone on customer service that doesn't have an indian accent. If that offends you, well it shouldn't. It's a real problem when YOU'RE PAYING 10 CENTS A MINUTE AND CAN'T TELL WHAT CUSTOMER SERVICE IS SAYING. So call this number instead and you'll reach someone instantly, 1-800-964-4836

Maybe that is the lowest point but surely there is opportunity as you blend services together and move more customer supprot online and away from call centre. Then of course there is VOIP - skype to skype calls are 'free' on a number of european mobile networks starting around $15 a month....

With significant network redesigns operator prices can go considerably lower. Simply look at the operators in India and Africa who are profitable with single digit ARPUs. Granted, they have designed their networks differently and parity in the US would take huge investments. However, never underestimate a telcos ability to hose itself with a good ole fashioned price war.

Sarah's comment may seem illogical, but she is right. If two carriers target a 40% margin, and one advertises heavily and one does not, then one carrier clearly has the ability to offer a price advantage to consumers.

How low can prices go? Comcast offers basic cable at ~$16/month (that's 43,200 MOUs per month), and Verizon DSL at $17/month (again, 43,200 MOUs).

Would a U.S. carrier allow skype, as a prior comment notes?

Tracfone is the largest Mvno in the US. They are giving Straight Talk a six month tril/test run with Verizon. There is no details on what will happen in the event they yank the cord in six months. Hopefully, they will continue it.
Major but little known Verizon mvno Page Plus Cellular is slated to announce new plans in August-September. There is heavy word out that they will be directly responding to the Straight Talk unlimited challenge with a very similar plan and price point.

These are the most exciting times in prepaid wireless ever.

Sue, you are probably right that Boost might become the low-cost leader. Their $50 deal is by far the best of all. First of all, it is a TRUE $50, no fees or taxes added. The others add fees/taxes. MetroPCS' $50 plan goes to over $60 after adding all extra costs, Straight Talk's $45 adds fees and taxes on top as well.

With Boost, on TWO huge national networks, Nextel's IDen network for their Boost Unlimited IDen offering and Sprint's for their Unlimited by Boost (UNLTD) CDMA offering, you get unlimited talk, unlimited text, unlimited data, unlimited walkie-talkie (on the IDen side) and unlimited GPS, all for $50 flat. Nobody comes close to offering the same for similar money.

How low can the pre-paid providers go? Given that Boost charges $50 for unlimited everything they could probably come out with a second product that reduces the web/data component from unlimited to 30 MB (matching Straight-Talk's data allowance) and undercut Straight Talk by a full $10.

I think $40 is quite possible, even probable, perhaps as low as $30.

I think the increased competition is something that can only benefit the customers.
But I wonder if the 'unlimited' hype is not a bit overrated. I read a study (can't for the life of me remember where) by an independent firm saying that most people use their phone on average for less than 400 minutes a month. So while you are paying for unlimited use that might actually sound very cheap, you might be better off paying less, for fewer minutes.
I use NET10 prepaid and will generally not use more than 200 minutes a month. Granted, I do not use the phone that much but paying $20 is much preferable to me than paying $50 just to be able to say I've got unlimited.

Straight talk is a great service. I use it, I love it. I cant envision myself using any other service with a great value and great reception i see no service better then Tracfone.

This sounds like a good deal. Does the text messaging include Canada?