Boost Mobile said it’s going after the big three carriers head on with a new annual unlimited plan that costs $25 per month.
It’s the latest in what the Dish-owned prepaid brand is calling “Carrier Crusher” plans. The first launched last month offering wireless service with talk text and 1GB of data for an annual price of $100. That targeted customers who use less than 10GB of data per month, while the new focus is on unlimited.
Both new and existing customers can get the latest no-frills unlimited plan that includes talk, text and data. Notably, users have to prepay for a full year, so $300 upfront plus taxes, and data speeds are slowed after using 35GB each month.
Still Boost said it’s intent on capturing the tens of millions who pay over $60 on average for their wireless service per month and claimed it can save customers up to $400 per year when switching from major carriers.
"Americans don't want to pay a penny more than they have to for wireless access. Boost believes that wireless service should be affordable to all," said Stephen Stokols, head of Boost Mobile, in a statement. "Today, Boost's Carrier Crusher plans offer Americans a new reality where customers can get unlimited data, voice and text for less than 50% of what they pay on the nation's largest carriers."
T-Mobile’s Metro by T-Mobile prepaid brand already started offering a $25 per month unlimited plan in July that also boasts a free 5G smartphone with trade-in. Unlike Boost, the Metro promo (which was still active as of December 3, according to Wave7 Research) is only for switchers.
A trio of other offers also launched from Boost today including a similar unlimited plan that costs $5 more on a monthly basis at $30, but allows customers to pay every three months instead of 12. The two other new “unlimited” plans each have a limited data allotment of 5GB and cost either $12.50 per month when paid per year (around $150 per year) or $15 per month when paid every three or six months.
Longer upfront payment timelines appear to be a trend with Boost’s most recent plans.
Boost is introing low-cost unlimited plans at a time when MoffettNathanson analysts say the wireless industry is more competitive on price than usual. The firm believes competition between major carriers for 5G subscribers has largely been reduced to who will offer the biggest discounts.
“In the absence of network differentiation, there is price, and only price,” wrote Craig Moffett in a December 8 deep dive analysis of postpaid mobile pricing. The firm’s analysis pegs T-Mobile as the leader with a price advantage (and best 5G network) after comparisons that took into account several factors including handset promos, add-ons like free Netflix or other media service, and taxes and fees.
“Their prices, whether at the headline level or after consideration of free programming, and both before and after the inclusion of handset subsides, are meaningfully lower than AT&T’s and Verizon’s, and they are more attractive than even those offered by the cable MSOs,” wrote Moffett, which sees the price leadership alongside best 5G network for T-Mobile. More on that report here.
To be clear, Moffett didn’t look at prepaid or Boost Mobile specifically which competes for a different segment than traditional postpaid carriers. However, the prepaid landscape is poised for competition changes like Verizon’s nearly $7 bilion acquisition of TracFone from América Móvil, which overnight boosts its prepaid base to above 20 million subscribers.
And during the holiday promo season, Fierce contributor and Wave7 principal Jeff Moore wrote that the top ad theme for prepaid is free 5G phones for switchers. In a recent column he cited TV ads for free 5G phones from Metro by T-Mobile, AT&T’s Cricket Wireless and Boost Mobile – the latter touting the new Celero5G.
As they compete in prepaid it’s worth noting that T-Mobile and Boost parent Dish have had a bit of a rocky relationship, particularly related to timing of T-Mobile’s legacy Sprint CDMA network shutdown. During the scuffle, Dish ink a new MVNO agreement with AT&T to transition Boost customers. Last month’s $100 per year wireless plan from Boost was the first offered on AT&T’s network.
Today’s offers also continue what seems to be a bit of a trend from Boost in terms of longer upfront payment terms. When Boost Mobile’s first iteration of “Carrier Crusher” plans launched, analysts Bill Ho of 556 Ventures and Mark Lowenstein of Mobile Ecosystem each pointed to the 12-month upfront payment model, telling Fierce that if Boost could get high take rates it would be beneficial financially, and attractive to investors.
At the time Ho noted that any annual payment also helps reduce churn. In Q3 Dish reported wireless churn of 4.61%.
Updated to reflect 5GB allotment price as $12.50 per month with 12-month prepay, not the previously stated $14 per month.