Jan 15 2009
$50 Unlimited Nationwide Calling Plan
Sprint Nextel Corp.’s (S) youth-oriented Boost Mobile wireless service plans to offer a $50 monthly unlimited nationwide calling plan in a bid to severely undercut the competition.
Boost Mobile will launch the plan, which includes unlimited text messages, mobile Web and walkie-talkie service, on Jan. 22, company executives said Wednesday. It represents the most aggressive move to win customers by Sprint, which has struggled to keep subscribers from fleeing its core service.
The Overland Park, Kan., company is looking to Boost to pick up the slack. The offering’s price is about half the $99 flat-rate plan offered by the other national carriers. Sprint itself offers a $99 “Simply Everything” plan that includes unlimited calling, text messages, faster Web surfing and other bells and whistles.
Boost has traditionally targeted younger customers, but with the cheaper plan, the service will go after consumers looking to save money. While its primary goal is to attract pre-pay customers, Boost is hoping to win over some consumers who traditionally sign long-term contracts. It plans to launch an advertising campaign to shift its message from youth to value.
Comparable plans from MetroPCS and Leap are in the $60 range. The $50 monthly rate includes other charges such as the telecom tax. The only additional charge comes from the state sales tax.
There are, however, trade-offs for the service. People looking to join Boost Mobile will have to switch to the Nextel network, which means buying a new phone not compatible with other networks. There are a limited number of phone choices, all from Motorola Inc. (MOT), although more phones are probably in the works. Phones runs between $20 and $100. Because there are no contracts, there are no subsidies for the handsets.