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May 19, 2014

AT&T Cricket Relaunch Aims to Shore up Value Segment Customer Base


AT&T Mobility is relaunching Cricket as its new national “no contract” and “prepaid” brand, retiring the Aio brand as part of the effort, at price points with service features that compete with comparable T-Mobile US offers aimed at price conscious customers.

Compared to earlier AT&T prepaid offers, the new plans offer more value. Rate plans include $35, $45 and $55 a month offers, after a $5 credit for using Auto Pay. Multiple-line accounts also get additional discounts, with a featured “four lines for as little as $100 a month” plan.

Unlimited talk and text plans start at $25 a month. International calling plans starting at $15 a month and Cricket also offers plans that include unlimited international texting.

The Cricket relaunch is one example of how hard it is to maintain a sustainable advantage in the U.S. mobile market. Not only has AT&T moved to counter prepaid offers from T-Mobile US, so has Sprint.

But T-Mobile US hopes it is attacking the other three carriers where they are most vulnerable, namely the value segment of the market, which tends to be prepaid single-line accounts, rather than family or multi-device accounts.

On the other hand, pricing and packaging innovation by both AT&T and Verizon with their “Mobile Share” and “More Everything” plans are aimed at protecting the key multi-user plans, as the direct combat with T-Mobile US, originally aimed at the value segment of the business, has expanded to include mulit-device accounts.

In February 2014, AT&T announced its “best-ever mobile pricing plans” for families and small businesses, part of an on-going response to price attacks by T-Mobile US. Verizon, for the most part, is taking smaller steps to protect its prepaid customer base, suggesting that Verizon originally saw the immediate danger to itself coming in the “value” segment of the mobile business.

T-Mobile US countered AT&T’s move by increasing data allowances for buyers of its “Simple Choice” plans.

On March 9, 2014, AT&T launched a new pricing plan (the offer expires at the end of March 2014) that extends savings of the “Mobile Share Value” plans to customers with one and two lines.

The importance of the latest move by AT&T is that it suggests the terrain of contested market segments now is wider than at first. T-Mobile initially attacked the single device market, AT&T responded to protect its important multi-user accounts.

Now AT&T has moved to extend discounts across nearly its entire postpaid customer base.




Edited by Maurice Nagle


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