Boost Mobile's decision to open up its $50 per month unlimited plan to Sprint Nextel's CDMA network will not broaden the market as much as Sprint would like, according to an analyst. Additionally, Boost's approach to the service--which requires the purchase of new phones--raises questions about carriers' control over the phones of their subscribers, according to Pali Research analyst Walter Piecyk.
Boost previously offered its unlimited prepaid service only on Sprint's iDEN network, though it has dabbled in CDMA in the past. However, last week the company--part of Sprint's prepaid unit--announced plans to offer three new CDMA phones that could access Boost's unlimited calling option, along with a BlackBerry device from Research In Motion and a $60 "BlackBerry Monthly Unlimited" plan.
Piecyk said Pali does not think the new effort will boost Sprint's prepaid business. "Sprint shut off roaming onto Verizon's network for these (new) phones, and the price of the phones is well above what prepaid customers are used to paying," he said. "Simply put, we do not believe there is any reason to increase our estimate for a decline in prepaid subscribers at Sprint in 2010."
As for Sprint's decision not to allow current Sprint CDMA phone users to switch onto the plan with their existing phones, Piecyk said the move is clearly motivated by Sprint's desire to hold onto high-ARPU subscribers. However, he said the decision highlights the open device regulation battle taking place in the wireless industry.
"Consumer advocate groups could easily find a Sprint postpaid customer that either bought full price for their phone or are past the contract period and want to take advantage of the Boost Unlimited rate plan," Piecyk wrote. "The customer owns the device, why should they have to buy a new one to get the cheaper rate plan? This would clearly be a difficult question to answer in front of a congressional committee."
A Boost Mobile representative told FierceWireless that the company would be addressing some of the issues Piecyk raised. "As we continue to roll out the Boost Mobile Monthly Unlimited offer on the CDMA network, we are exploring ways to simplify our customer service experience and provide greater flexibility for customer migrations," the spokesperson said in a statement.
- see this Pali Research blog post (sub. req.)
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Article updated Jan. 11 with Boost Mobile's statement.