Monday, January 15, 2007

Boost Mobile to Offer Unlimited Calling Plans

Sprint is planning to launch an unlimited local calling plan through the Boost Mobile MVNO. Boost Mobile provides pre-paid service and targets the urban youth market. The unlimited local calling plan will compete with current offerings provided by MetroPCS and Leap Wireless. The pre-paid and sub-prime wireless market is experiencing significant growth.

Boost Mobile, historically, has used Sprint's iDEN network to offer service. This will change with the new local calling service, as the offering will use Sprint's CDMA network. The service will not be launched nationwide. Sprint will look to launch the service in areas where there is extra CDMA network capacity. Sprint will also look to launch the service in markets where MetroPCS and Leap Wireless do not currently operate.

There are still issues that Sprint will need to address internally, such as segmentation and cross structure, so that the new unlimited calling service does not cannibalize other Sprint product offerings. However, the company feels that the service is needed to address a gap in product offerings. Also, a lower-cost service with lower credit requirements will allow Sprint to offer an alternative to potential customers or those who may churn to other wireless carriers.


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