The war over unlimited data has expanded into the prepaid market. As if you didn’t see that coming.
T-Mobile and Sprint launched the first salvos last August when they introduced so-called “unlimited” data plans, sparking a war between the nation’s largest carriers that has escalated significantly in recent months. Verizon finally joined the battle a few weeks ago in a move that marked a significant about-face in strategy, and AT&T said just a few days later that it was expanding its unlimited offering to all customers after limiting it exclusively to subscribers of its DirecTV service.
Those carriers have consistently sweetened their unlimited offers by lowering prices and adding perks like HD video and data allotments for hotspot usage. And now they’ve begun to extend unlimited offerings through their prepaid brands, Wave7 Research reported this week.
“The new postpaid unlimited war that began with the February launch of Verizon Unlimited has spilled over into prepaid competition,” the firm observed. “Unlimited for prepaid generally involves or will soon involve compression, but Verizon is not compressing data and compression rates vary among the other postpaid carriers.”
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Predictably, the assaults among prepaid service providers are taking shape in various forms. T-Mobile’s MetroPCS expanded its monthly 8 GB plan to include unlimited data, while AT&T’s Cricket cut the price of its existing unlimited plan from $70 to $60 a month. Sprint’s Boost has begun offering four lines of compressed unlimited data for $100 a month for users who switch carriers.
And Sprint's Virgin brand joined the party with a new $60-a-month unlimited plan, Wave7 noted this morning.
Those offerings are coming to market just as prepaid companies are stepping up their annual tax-season promotions. MetroPCS, Cricket and Boost all launched tax-season offers in late January, Wave7 reported, and Boost’s unlimited campaign forced some competitors to follow suit: MetroPCS launched a $50 monthly unlimited plan as well as raising instant rebates for users who switch, while Cricket launched a $50 bill credit and began packaging five free Galaxy phones with service for $100 a month.
All that promotional activity underscores a prepaid market that has become extremely competitive over the last two years as the economics gap between prepaid and postpaid continues to narrow. Carriers are seeing prepaid ARPU increasing even as their monthly average revenues from postpaid users wane.
This story was updated March 3 to note Virgin's new unlimited data plan.