Leap Wireless Adds Features As Prepaid War Heats Up
August 03 2009 - 5:28PM
Dow Jones News
Leap Wireless International Inc. (LEAP) threw a few more
features into its core service plan as it looks to keep pace in the
increasingly competitive prepaid race.
Late Monday, the San Diego discount wireless provider - which
operates in the market as Cricket - tacked on services such as
unlimited wireless Web, directory assistance and email access to
its plans, bringing them into parity with MetroPCS Communications
Inc.'s (PCS) moves from Thursday. The changes underscore the
increasing pressure to offer new bells and whistles - if not price
cuts - to lure consumers looking for the latest deal.
"I think it certainly makes us more competitive," said Greg
Lund, a spokesman for Leap.
Leap shares lost a penny to $24.95 in after-hours trading, while
MetroPCS was unchanged at $12.41. Both companies saw their shares
fall Thursday after MetroPCS unveiled its new features.
While Leap declined to comment specifically on the competition,
Lund acknowledged that it is a tough environment. In addition to
Leap and MetroPCS, Sprint Nextel Corp.'s (S) Boost Mobile has come
in with its flat-rate $50 plan and seen a large influx of
customers. America Movil SAB de CV's (AMX) Tracfone is
experimenting with a nationwide $45 plan under Straight Talk, which
uses Verizon Wireless' vaunted network. Verizon Wireless is jointly
owned by Verizon Communications Inc. (VZ) and Vodafone Group PLC
(VOD).
Prepaid service, where people pay ahead of time for the minutes
they use and aren't tied into a long-term contact, has surged in
popularity as consumers look for ways to cut their expenses. With
the wireless industry maturing, the low end of the market is seen
as one of the pockets of growth.
As interest in this segment ramps up, so do the efforts to win
over customers. Leap's $40 plan gets unlimited Web access,
directory assistance, and the ability to roam for free within the
company's network and roaming partners. The $45 plan also gets
unlimited email, data backup and 30 minutes of roaming from
anywhere in the country.
Leap and MetroPCS have a disadvantage in the lack of nationwide
coverage. While Leap and its roaming partners provide access that
stretches from coast to coast, it isn't considered true nationwide
access. Rivals, however, are able to offer the ability to make a
call from anywhere in the U.S.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153;
roger.cheng@dowjones.com