As they continue to lose traditional contract subscribers, Sprint has begun focusing more and more attention on the prepaid mobile market. Today, the company announced it’s about to launch a fourth prepaid mobile brand.
The yet-unnamed brand will join Sprint Nextel’s current prepaid lineup of Boost, Assurance Wireless and Virgin Mobile.
While these existing brands offer per-minute plans, their target consumer has been those looking for low-price monthly rates that don’t require long-term contracts. Sprint says the new brand will be aimed at those who only use their cell phones infrequently — specifically middle-aged consumers — and who could be enticed by a low-cost per-minute plan.
According to Sprint, while the company lost 578,000 traditional contract customers last quarter, they gained 348,000 users for its prepaid mobile services.
“People will look at 2010 as a tipping point,” said the head of Sprint’s prepaid division. “You are going to see more growth clearly from prepaid, and that will be the case for Sprint as well.”
In addition to the new prepaid brand, Sprint announced a revamp of the Virgin Mobile plans. For $25/month, they’re offering unlimited texting, email and Web surfing, plus 300 minutes a month. For $40, the monthly minutes increase to 1,200, and $60 gets you unlimited minutes.
Among the reasons for Sprint’s wanting to increase their prepaid base is the lower cost of signing up a new customer. The company says the average cost to them for signing a new traditional contract user is $500, compared to only $100 for a prepaid user. Meaning that it only takes around six months for the company to break even on a prepaid customer, while it takes at least a year to reach the same level with a traditional user.