Analyst warns of prepaid price wars

The success of Boost Mobile's $50 unlimited voice, data and walkie-talkie service has reignited fears of a wireless price war. Boost brought Sprint Nextel 674,000 new prepaid subscriptions in the first quarter, largely thanks to the unlimited plan. According to analyst Craig Moffett of Sanford C. Bernstein & Company, this is evidence that a price war is coming. Moffett said that 80 percent of industry-wide net subscriber additions in the first quarter were prepaid; in 2008 that the percentage was never higher than 51 percent in any quarter. Sprint CEO Dan Hesse dismissed the idea that Boost's prepaid offering would cannibalize the postpaid model, but Moffett warns that a battle for market share is replacing a chase for market growth--and price will be the deciding factor. Article, article.

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