T-Mobile USA opened up its network to TracFone's Straight Talk prepaid unlimited service, according to a research note from BTIG analyst Walter Piecyk. A T-Mobile spokeswoman confirmed the report.
The confirmation comes hot on the heels of Wal-Mart's decision to begin selling TracFone's Straight Talk prepaid unlimited service with phones that run on AT&T Mobility's (NYSE:T) GSM network. Previously, Straight Talk phones and service only ran over Verizon Wireless' (NYSE:VZ) CDMA network. By offering Straight Talk over AT&T and T-Mobile's GSM networks, TracFone will be able to offer GSM handsets.
Piecyk said that the crowding of the prepaid unlimited market, coupled with Leap Wireless' (NASDAQ:LEAP) decision to ink a 3G data roaming deal with Sprint Nextel (NYSE:S) (thereby becoming an MVNO of Sprint) and the struggles of Sprint's iDEN network are all inevitable evolutions of the market.
"This is what happens in competitive markets with high fixed costs that are approaching maturity," Piecyk said. "Voice revenue is in decline and operators will continue to look for more ways to utilize the capacity on their networks. We expect voice pricing to continue to get incrementally competitive in the second half of the year, but it's more likely to happen on the postpaid side of the business given the disparity with unlimited prepaid pricing."
Piecyk said that his firm believes Straight Talk phones are packaged with SIM cards that work on either T-Mobile or AT&T's network, and that TracFone's deals are based on a monthly fee paid per customer for a bucket of minutes. BTIG also speculated that when a T-Mobile phone roams onto AT&T's network, T-Mobile will cover the cost, Piecyk wrote.
- see this BTIG research note (sub. req.)
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Article updated Aug. 5 with confirmation from T-Mobile.