The prepaid landscape has been reset for 2022. The biggest change is that there is a new sheriff in town. In 2020, I wrote that the TracFone transaction would take Verizon “from worst to first in prepaid.” This has happened. Now, there are other developments in the works that will make 2022 a very different year in prepaid.
Verizon is now the biggest prepaid carrier. The math is easy. TracFone had 20.1 million subscribers, and Verizon reported 4.1 million prepaid subscribers recently, so the combined prepaid subscriber count is now above 24 million. T-Mobile has nearly 21 million subscribers and is now in second place, with Metro by T-Mobile comprising the vast majority of T-Mobile’s prepaid subscribers. Metro by T-Mobile, by the way, can still honestly claim to be the brand with the most prepaid subscribers.
AT&T remains in third place with 17.4 million subscribers. Most of these are Cricket Wireless subscribers, as the carrier announced in October that Cricket Wireless has 12.4 million subscribers, having added more than two million subscribers in two years.
Verizon leads in two of three channels
I divide prepaid sales into three very different channels: national retail, the independent multi-carrier dealer channel, and the prepaid carrier store channel. The top national retailer for prepaid is Walmart, where Straight Talk has more than 9 million subscribers and is now Verizon’s leading prepaid brand. Other Verizon brands at Walmart are Walmart Family Mobile, Verizon prepaid, Total Wireless, TracFone, Simple Mobile, and Net10 Wireless. While Verizon is the new leader in prepaid at Walmart, it is also true that Metro by T-Mobile is now sold at a majority of Walmart stores.
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Verizon also dominates prepaid sales at Best Buy, where all prepaid phones sold are from a Verizon-owned brand, apart from the senior-focused Lively brand. True, SIMs are also sold there by Mint Mobile, Ultra Mobile, H2O Wireless, and other carriers. There are other retailers where a majority of prepaid phones sold are now from Verizon brands.
Verizon now dominates sales in the multi-carrier independent prepaid channel also. Wave7 Research conducts a quarterly survey of 30 independent dealers that sell multiple prepaid brands. These stores range from bodegas to phone repair shops to electronics stores, as long as prepaid brands are sold. Simple Mobile has been the winner in each one of the 28 surveys. And it has never been close. Other Verizon brands seen in this channel are PagePlus Cellular, Net10 Wireless, Total Wireless, and GoSmart Mobile. Our most recent survey was published by BestMVNO on January 5.
But Verizon might choose to prune some brands.
As mentioned, Straight Talk has 9.5 million subscribers and is easily the top prepaid brand at Walmart. Simple Mobile is the leader in the multi-carrier channel and has great appeal in immigrant communities. Verizon should foster these brands, advertise them, and improve what they provide. As to low-priority brands like GoSmart Mobile and Page Plus Cellular? A little pruning would not hurt.
…But Verizon is in a very distant fourth place in terms of prepaid stores
Metro by T-Mobile, Boost Mobile, and Cricket Wireless are “the big three” in terms of prepaid stores. There are nearly 17,000 stores that sell one of these brands. There are more than 200 Total Wireless Stores where various TracFone brands – and no other brands – are sold. Verizon could keep this channel as it is or could massively expand it, or anything in between. Wave7 Research has reported that Verizon has researched this channel carefully, so it seems likely that Verizon will invest in this channel, creating more competition for “the big three” in urban areas.
RELATED: Confirmed: Verizon testing sales of prepaid service through exclusive dealers
Also, Verizon has a history on this. In 2016, Verizon started launching dozens of stores via dealers that sold nothing but Verizon prepaid. This effort fizzled, but it shows Verizon’s interest in retail prepaid. Selling a variety of brands — not just Verizon prepaid — including the popular Simple Mobile brand might give Verizon a shot at success with such an effort.
And what about Dish Network’s prepaid efforts, including Boost Mobile?
The good news for Dish Network is that Boost Mobile continues to have a very strong brand that promises value and then delivers it. It has thousands of stores, which are operated by experienced dealers, and high energy is clearly there. Unfortunately, the kabuki dance between three networks has contributed to high churn and customer losses.
In 2022, I expect Dish Network to develop a portfolio of prepaid brands, each with a focus on a different segment. Boost Mobile, of course, is focused on value, mostly in urban areas. Republic Wireless is likely to be used to win older customers. Dish Network in September announced that it was acquiring Gen Mobile to pursue customers with government-assisted programs. I look forward to hearing about Ting Mobile, which is also part of the Dish Network portfolio of prepaid brands.
Then there are the upstarts
In 2021, there was significant TV advertising from other prepaid brands as well, including Mint Mobile, TextNow, Pure Talk and Red Pocket Mobile, with H2O Wireless also doing some TV advertising. Visible advertised heavily during the holidays. Google Fi started running TV ads in 2021 and has deep pockets. Some of these brands have a presence at national retail, and phones from Mint Mobile are now seen at some Target stores. Wave7 Research recently reported a launch of Ultra Mobile SIM sales at some Walmart stores.
“Gunfights” in 2022?
In some Western movies the new sheriff takes charge, and the outlaws are defeated. In others the new sheriff is not up to the task, and he loses out. I’m looking forward to some interesting prepaid “gunfights” and “barfights” in 2022.
Jeff Moore is Principal of Wave7 Research, a wireless research firm that covers U.S. postpaid, prepaid, and smartphone competition. Jeff has 25 years of telecom industry experience, including 13 years of competitive intelligence work for Sprint. Follow him on Twitter @wave7jeff.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.