Leap introduces new $40/month smartphone family plans to spark sales
Cricket provider Leap Wireless (NASDAQ:LEAP) launched a new family plan offer to entice customers to sign up for its smartphone plans. The flat-rate carrier also tweaked its pricing plans for Apple's (NASDAQ:AAPL) iPhone, lowering the entry-level plan by $5 per month.
Cricket said its new family plan is now available to customers who purchase two or more smartphone rate plans with Cricket's "Automatic Bill Pay" feature. The new family plan is available in Cricket company-owned stores and select dealers nationwide. The plan includes two smartphone lines for $40 per line per month and includes all the standalone features of the company's $50 smartphone rate plan. That plan offers unlimited voice, texting and 1 GB of data at full-speed per month, as well as Muve Music, which allows customers to download an unlimited number of songs onto their Cricket phones.
The carrier noted that its new family plan is available to new and existing Cricket customers and is also available to Cricket Lifeline customers. Cricket's new offer comes as the company is trying to regain momentum and get back to adding subscribers.
Leap lost 337,000 net subscribers in the fourth quarter, an increase from net losses of 269,000 customers in the third quarter and a sharp reversal from the gain of 179,000 in the year-ago period. Leap said the fourth-quarter losses reflected discontinued sales of its daily PAYGo product to new customers in October 2012, its shift in national retail to fewer, more productive retailers and locations, and continued de-emphasis of its broadband service.
In addition to the family plan offer, Leap made changes to its iPhone plans, bringing the $55 plan down to $50 and in line with its Android Muve Music plans. The $50 plan includes unlimited calling, texting, 1 GB of full-speed data and mobile hotspot capabilities. Leap also said it will pair the iPhone with its $60 plan, which includes unlimited calling, texting, 2.5 GB of full-speed data with mobile hotspot capabilities, and with its $70 plan, which ups the data allotment to 5 GB of full-speed data.
The $50 plan is among the cheapest in the market for the iPhone. América Móvil's U.S. MVNO TracFone Wireless, through its Straight Talk brand, starting selling Apple's iPhone, including the LTE-capable iPhone 5, coupled with unlimited talking, texting and data starting at $45 per month in January. Sprint Nextel's (NYSE:S) Virgin Mobile brand offers unlimited voice, texting and data for $55 per month, though it throttles users' data speeds if they go over a 2.5 GB monthly cap. T-Mobile USA's new no-contract Simple Choice plans start at $50 for unlimited voice, texting and 500 MB of data for $50 per month, but those plans don't include the cost of the phone (the addition of which would raise the cost to $70 per month).
"The new iPhone plans give customers more flexibility and choice," Leap spokesman Greg Lund said in an email. "Customers on the current $55 iPhone plan may continue on that plan for as long as they keep their service activated. Customers who would like to change from their current iPhone plan may do so without being charged any fees. However, these customers will be required to pay for any prorated difference between their current iPhone plan and their new iPhone plan--similar to any other rate plan change."
In February Leap revealed in a regulatory filing that it would probably only sell half as many iPhones as it planned during the first year of its contract with Apple. If iPhone sales do not pick up, Leap said it could be forced to buy $100 million of unsold iPhones this summer.
Last June Leap committed $900 million over three years to sell Apple's iPhone. The company was the first U.S. prepaid carrier to sell the iPhone and at that time said it did not think the cost of the iPhone would have a major impact on its margins or capital expenditures in 2012.
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