Sprint (NYSE:S) prepaid brand Boost Mobile is launching a promotion for LTE customers that cuts the price of service down to $35 per month for the first six months. The price cut and promotion are the latest example of price cutting both at the Tier 1 carriers and their prepaid brands.
Under the Boost promotion, which runs through March 31, customers who sign up for service with an LTE smartphone will pay $35 per month for unlimited voice, texting and data, though they will only get 2.5 GB of high-speed data before throttling. Once the 2.5 GB limit is reached, data will be slowed to 3G speeds for the remainder of a customer's billing cycle. Boost's normal plan for smartphones with comparable unlimited service is $55 per month.
After six months, service pricing will go up to $50 per month. However, as Boost notes, once the introductory rate ends, customers will qualify for Boost's Shrinking Payments plan. Payments will start at $50 per month, and for every six on-time payments, Sprint will take $5 off the customer's monthly bill, letting them pay as little as $40 a month.
Boost's LTE devices include the iPhone 5s, iPhone 5c, ZTE-made Boost MAX, Samsung Galaxy S III, LG Optimus F, Boost Warp 4G, HTC One SV and Boost Force. Sprint's LTE coverage lags coverage from Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T), but it is currently in 340 markets. Sprint aims to have LTE coverage on its 1900 MHz spectrum to 250 million POPs by mid-year.
The Boost price cuts come shortly after AT&T prepaid brand Aio Wireless cut its pricing. Aio's new plans include a $40 plan for unlimited voice, texting and 500 MB of data before throttling, compared to an old $40 plan that had 250 MB of data before throttling. The $40 plan also now supports smartphones, whereas it did not before. Aio's new $50 plan includes unlimited voice, texting and 2.5 GB of data, compared to an old $55 plan that had 2 GB of data. And Aio's new $60 plan includes unlimited voice, texting and 5 GB of data, compared to an old $70 plan that had 7 GB of data.
AT&T plans to soon discontinue the Aio brand following the closing of its deal for Cricket provider Leap Wireless (NASDAQ:LEAP), which is expected before the end of the first quarter. AT&T has promised to "shake up" the prepaid market with the Cricket brand.
AT&T also recently cut prices on its higher-end Mobile Share shared data plans. AT&T said customers who choose a Mobile Share plan with 10 GB of data per month or higher will see a range of savings, depending upon their existing plans. For example, customers who sign up for four smartphones with unlimited voice, texting and 10 GB of data will now pay $160 per month, or $40 less than AT&T's old plan at that level. Analysts see the changes as both a response to T-Mobile US (NYSE:TMUS) and as a way to hit rival Verizon and its family plans.
Verizon too recently launched two new limited-time plans for single-line customers only, and the plans include unlimited voice, unlimited messaging and 250 MB or 1 GB of data for $45 and $60 per month, respectively. Data overages are $15 per 250 MB of data with the $45 plan, and $15 per 500 MB of data on the $60 plan.
Analysts at Jefferies recently met with Verizon Communications CFO Fran Shammo and came away with the impression that Verizon will remain conservative on the price war. "While these plans compete with AT&T and T-Mobile on headline pricing, management noted that customers typically purchase more expensive, higher-capacity plans," they wrote in a research note. "Unlike its peers, Verizon is conservatively rolling out equipment installment plans, allowing customers with only the best credit profiles to sign up for its EDGE EIP due to fraud and credit concerns."
- see this Boost page
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Article updated to clarify that data will be throttled to 3G speeds on Boost plans only when customers have already used 2.5 GB of LTE data in their monthly billing cycle.