MetroPCS, which has recently expanded its prepaid wireless service offering to several large cities throughout the U.S., has just lowered its unlimited monthly plan to $40 a month for voice, texting and Web access.
The new lowered prices ushers in a new era of competition in the prepaid market, which is heating up as Sprint Nextel announces this week its intent to buy Virgin Mobile USA for $483 million.
MetroPCS, a regional prepaid operator, is now adding unlimited email, navigation and social networking to its $45 a month unlimited plan. This is in addition to unlimited voice, texting and Web access. These plans are now $5 a month less than they were before the price cut was announced.
The company also offers a $50 a month unlimited plan for smartphone users, which includes unlimited HTML Web browsing.
The move is a clear indication that MetroPCS is ratcheting up the pricing pressure to compete more aggressively in the crowded prepaid market. TracFone, which is the largest prepaid carrier in the market, offers a $45 a month unlimited plan for voice, text messaging and 30 MB of data. And Sprint's Boost Mobile prepaid brand started offering a $50 a month unlimited plan in January. Executives are attributing the recent growth in its prepaid customer base to this new service.
MetroPCS's cuts could spark a price war, which could further drive down how much revenue is generated per user. In a market that already relies on heavy customer volumes and super low cost structure to reach profits, further pricing pressure will only make it more difficult for these carriers to make money with prepaid services. But the good news for consumers is that they will get access to some very good deals in wireless if the choose to take the prepaid wireless route.