Dialing into less costly wireless
MetroPCS and Cricket Wireless have been luring customers with flat-fee, no- monthly-contract service.
Want to save on your monthly bills? Then you're a target customer for two of the newest combatants in the Philadelphia Phone Wars.
After years of house-to-house combat between Verizon Communications and Comcast for landline customers, the region's air war has been heating up since the arrival in July of MetroPCS and in March of Cricket Wireless.
Cricket and MetroPCS are second-tier wireless companies with their own networks and big aspirations: to lure an ever-larger subscriber base with their flat-fee, unlimited-talk-and-text business models and prices that start as low as $30 or $35 a month.
Their recent success has undoubtedly been fueled by a recession that has made many potential customers more cost-conscious. "The worse the economy gets, the better it gets for these companies," said telecommunications analyst Jeff Kagan.
But both were growing when the economy was booming, and a recovery shouldn't stop their progress. Without contracts and termination fees, they say, they have learned the necessity of good value and customer service.
"We essentially have to earn our customers' business every month," said Cricket spokesman Gregory Lund. "They can walk away anytime they want."
For consumers weighing a change in wireless providers, or looking for their first phone, Cricket and MetroPCS are worth considering, as are prepaid plans from the major carriers or companies such as Virgin Mobile, which uses the Sprint Network. But it's important to understand their business models.
Cricket and MetroPCS built their niches by catering not just to the budget-conscious, but to customers who don't really need the nationwide coverage touted by the major wireless companies. Each began in a handful of local markets, and neither can claim a true national footprint.
As of Dec. 31, Texas-based MetroPCS claimed about 5.4 million subscribers in eight states. Cricket, owned by San Diego's Leap Wireless, says it has about 4 million subscribers in 32 states. In a national wireless market that claims 270 million subscribers and nearly $150 billion a year in revenue, they are small fish.
With their pay-in-advance models, both companies also attracted customers seeking to avoid the credit checks required by the major carriers, as well as those wanting to steer clear of the multiyear contracts that the major carriers favor and that many consumers loathe.
And both targeted the small but growing segment of the population ready to "cut the cord" and forgo having a traditional landline phone - now about one in five U.S. households, according to Roger Entner, head of telecommunications research at the Nielsen Co.
"Landline replacement" has been a Cricket theme since the company launched service a decade ago in Chattanooga, Tenn. Its original pitch was for flat-fee unlimited local service - much like that offered by traditional phone companies such as Verizon. Three-fourths of its customers say their Cricket phone is their only phone.
Over the years, Cricket has borrowed concepts from the national carriers that made its flat-fee offerings more valuable. For example, it added free long distance in 2004.
If you are considering a move to Cricket or MetroPCS, here are some factors to keep in mind:
Coverage. With each company, you can count on some level of service across the Philadelphia region and down to the Jersey Shore - MetroPCS just added the Shore to its map on May 22.
You can also count on coverage in Pittsburgh - one of Cricket's first markets. But if you're driving the turnpike from Philadelphia to Pittsburgh, you'll pay roaming fees to use your phone.
Still, each company offers service in an impressive array of local markets, which may make either suitable for those who travel by air. And both benefit from a network-sharing agreement they reached last year, after Leap rejected a takeover attempt by MetroPCS.
One warning: MetroPCS offers street-level detail in its coverage maps. Cricket does not, but it gives you three days to test service where you live, work, and routinely travel. As long as you don't use more than 30 minutes of air time, you can return your phone and cancel service for a full refund, Lund said.
Service plans. Both companies' plans start with the basics and build up from there.
For $30 a month plus about $7 in taxes and fees, Cricket offers unlimited talk and texts, plus Caller ID. If you want long distance, call waiting, three-way calling, and voice mail, you'll pay $35.
Cricket's all-you-can-eat plans are a bargain. If you don't need to roam outside its coverage areas, you'll pay less than half the cost of an unlimited plan from a major carrier. And Cricket's top-priced plan, for $60 a month, includes 200 minutes of roaming.
MetroPCS's plans are similar, and the company also offers a novel service geared toward families willing to cut the cord: For $5 a month, they can add a "GroupLine" phone number, which rings simultaneously on all family members' phones.