Today, metroPCS announced unlimited international calling to more than 100 countries for an additional $5/month. If you sign up for metroPCS' extreme unlimited plan, at $50/month, you get unlimited local and domestic long distance calling, nationwide coverage, unlimited texts (domestic and international), unlimited web and e-mail access, unlimited navigator, MapQuest and premium directory assistance. For another $3, they throw in unlimited calling to Mexico, or $5 unlimited calling to more than 100 countries. That's $55 for everything. No one else comes close! So far, that is.
The impact of the unlimited international calling plan will be immediate and far reaching. I liken this to the announcement of AT&T's Digital One Plan, introduced in 1996, when AT&T offered "free" roaming and domestic long distance calling. This was the beginning of the end of the US long distance business, as users began using their mobile phones for "free" LD calls. And unlimited international calling plans, key to the prized ethnic market, will be very compelling. Heck, I think anybody that makes more than an occasional international call, will sign up for this plan, "just in case."
As with other calling plans, this latest move is another in the trend toward mobile operators providing flat-rate connectivity, for calling, text and web through the many unlimited plans, and now for the first time, unlimited flat-rate international calling. Flat-rate connectivity and open networks (where any device can be connected) are the Nirvana that so many are waiting for, and today we just took another important step in this direction.
metroPCS' move puts tremendous pressure on CricKet, Virgin and Boost, all of whom have been in near lock-stop rolling out competing unlimited plans and all of whom count the "ethnic market" as an important part of their base and target market. But this trend could bleed into the postpaid market. Consider that according to UBS analysts, prepaid services like those offered by metroPCS, CricKet, Virgin and Boost, will NET more than three times as many new subscribers as Postpaid net adds, and that was before this latest move, which can only improve the relative net adds. In fact, according to these UBS analysts, the unlimited prepaid segment represented 51% of industry net adds in the first quarter of this year.
As word of this new unlimited international calling plan spreads, competitors will need to move quickly. Remember, prepaid users have no contracts, so without the hefty early termination fees that go with Postpaid (Contract) services which comprise the bulk of Verizon, AT&T, Sprint and T-Mobile's subscriber bases, the shift could be on quickly.
Don't think that the Big Four national operators are immune from churn as a result of this plan, or can sit idly by. There is a reason so much growth is going on in the Prepaid segment: the economy and the value that these prepaid offerings provide are hard to ignore.
Competition is clearly heating up, and consumers will benefit.
Totally agree big move. Major carriers make billions on currently very high margin International calls.
Posted by: Rupert Young | June 26, 2009 at 12:51 PM