A price war in the prepaid market might be near

Jul 31, 2009 10:59 GMT  ·  By

Wireless carrier MetroPCS recently announced that it had lowered its unlimited monthly plan to $40 a month, while offering users voice, texting and Web access services. In addition, the company also extended its prepaid wireless service to cover more large cities in the United States. The new cut in the offering comes amid a tightening competition in the prepaid market area, with competitors like Boost Mobile, and with Sprint Nextel acquiring Virgin Mobile USA.

According to the carrier, users will now receive unlimited email, navigation and social networking on the $45 a month unlimited plan that already offered them unlimited voice, texting and Web access. Originally, the plan came with a price of $50 a month, and now the company has slashed it with $5, while also adding more features. At the same time, the operator also delivers unlimited HTML Web browsing for smartphone users, in a $50 a month unlimited plan.

It's a common fact that the prepaid area of the market has seen a lot of price drops lately, and it seems that MetroPCS also decided to make a move in this direction. There are other carriers that also used to offer $50 a month unlimited plans and which lowered the prices, among which we can count TracFone, a carrier that is now offering a $45 a month unlimited plan that includes voice, text messaging and 30 MB of data.

At the same time, Boost Mobile, a division of Sprint Nextel, announced a $50 a month unlimited service offering at the beginning of the year, and it seems that the plan has had great success as the company's latest growth in the number of customers it’s attributed to it. Recently, the company announced a price cut for its plans, aligning all of them at the $50 mark.

A price war in the prepaid market has been expected for quite some time now, and it seems that the recent cost cuts might just be the beginning of that. Even so, lowering the prices even more might not prove a great move for some carriers, as they will find it even more difficult than before to gain profit from the prepaid services they offer.