Sprint Nextel (NYSE: S) said it will fold its Common Cents Mobile prepaid brand into its Virgin Mobile payLo offering in May, a move that brings to an end a brand Sprint launched less than a year ago. Research firm Current Analysis first noted the action.
Sprint alerted its Common Cents Mobile customers about the change, noting that "our service will remain the same as it is right now so long as your Common Cents account remains active and you remain on this plan." The carrier said Common Cents customers will still get 7-cent-per-minute calling, and can purchase Virgin Mobile top-up cards to replenish their minutes. The carrier promised to provide additional information on the transition "in a few weeks."
"Common Cents as you may recall was a brand limited to Wal-Mart and was never rolled out nationally," wrote Sprint spokeswoman Janye Wallace in an email to FierceWireless. "As payLo is targeted at the same 'basic talker,' we've opted to make this transition. Current Common Cents customers need not make any change, but will now have access to more options for plans and handsets under payLo as well. Common Cents is due to move out of Wal-Mart in mid-May; those pegs will be taken over by Virgin Mobile's Beyond Talk plans which have already seen solid success in Wal-Mart."
Wallace said Sprint does not plan to cut any jobs due to the move. She also said the action was not part of a broader overhaul of Sprint's prepaid strategy.
"Operating too many prepaid brands is ultimately a cost drain from a marketing viewpoint," Current Analysis analyst William Ho told FierceWireless. "Standing out in a sea of prepaid competitors, especially with an unknown brand, may be tough to get traction. This may have been an uphill climb since Common Cents targets the TracFone crowd. TracFone is a well-known and long-running brand that has a following."
Indeed, TracFone netted a whopping 1.1 million net customer additions in the fourth quarter.
Sprint launched its pay-per-minute Common Cents Mobile brand in May last year with an eye toward targeting voice-centric customers who eschew data plans and do not want flashy phones. Customers were charged 7 cents per minute or 7 cents per text. Subscribers could purchase a $20 refill card for 30 days of service and a $30 card for 60 days of service. Additionally, the Common Cents brand rounded down unused parts of minutes instead of rounding up. However, subscribers forfeited any unused money at the end of a term.
The Common Cents Mobile launch coincided with the introduction of Sprint's mutli-brand prepaid strategy that also included Boost Mobile, Virgin Mobile, Assurance Wireless. According to Sprint, "Boost Mobile serves customers who are voice and text messaging-centric with its popular $50 Monthly Unlimited plan with Shrinkage service where bills are reduced after six on-time payments. Virgin Mobile serves customers who are device and data-oriented with Beyond Talk plans and our broadband plan, Broadband2Go. ... Assurance Wireless provides eligible customers, who meet income requirements or are receiving government assistance, with a free wireless phone and 250 free minutes of national local and long-distance monthly service. Common Cents Mobile caters to budget-conscious customers with 7-cent minutes that Round Dow and 7-cent text messages."
At the end of the fourth quarter, Sprint reported that it added around 1.6 million net prepaid subscribers during 2010, compared to gains of 2.6 million net prepaid subscribers in 2009 and 981,000 prepaid subscriber losses in 2008. The company said its prepaid subscriber additions in 2010 were "principally driven by net additions from the Assurance Wireless and Boost Mobile brands, partially offset by net losses associated with the Virgin Mobile brand."
Sprint ended 2010 with 33.1 million total retail postpaid subscribers and 12.3 million retail prepaid subscribers. Sprint has continued to leverage its prepaid business to compensate for postpaid losses--Sprint ended 2008 with 36.7 million retail postpaid subscribers and 3.6 million retail prepaid subscribers.
- see this Common Cents Mobile page
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Article updated April 8 with clarification from Sprint.