Back in middle August, we reported that T-Mobile were launching a new retail idea called Simply Prepaid, which combined four of T-Mobile’s existing prepaid services into one convenient location. T-Mobile announced that they already have a long list of independent wireless dealers interested in their new proposition. In a recent interview with FierceWiress a T-Mobile representative said, “to date, stores that have opted into the new initiative are seeing a significant increase in T-Mobile sales as compared to similarly located stores not in the program.” The Simply Prepaid offering combines T-Mobile’s existing prepaid device and plan portfolio with the three of T-Mobile’smobile virtual network operators (MVNOs, essentially a reseller of a given carrier’s network). these being GoSmart Mobile brand, Univision Mobile and Ultra Mobile. GoSmart was launched in February 2013, Univision mobile is tailored for Hispanic customers and Ultra Mobile was launched at the end of October 2012 with a focus on low cost international calling, but was recently given access to T-Mobile’s LTE network.
Simply Prepaid stores are operated by independent dealers using an exclusive franchise model. Dealers who have signed up receive signage and marketing materials for their store in exchange for being unable to sell other brands (it’s perhaps no surprise that T-Mobile report sales are up!). The brand has been trialed in Chicago, Houston, Los Angeles and New York City. T-Mobile is planning to roll out three hundred Simply Prepaid stores by the end of the year. T-Mobile have also said that pricing for the services offered is consistent across all of its retail outlets, which means there isn’t any disadvantage for customers to visit a different store or go online. The advantage of visiting a Simply Prepaid is hopefully speaking to knowledgeable employees and benefiting from good customer service. Other operators have introduced similar packaged retail stores; Mexican Am©rica M³vil’s North American MVNO, TracFone Wireless, is selling a Simple Mobile Solutions Non-Exclusive program to independent wireless dealers. This bundled up TracFone’s Simple Mobile, Net10, Telcel America, TracFone and SafeLink brands and provides the dealers with support, training and of course money. One difference between Simply Prepaid and Simple Mobile is that Simple Mobile dealers must provide their own exterior signage and may devote up to 25% of the store’s retail space into selling other wireless brands.
T-Mobile’s announcement comes at a time of intense competition between the larger North American carriers (AT&T, Verizon, T-Mobile and Sprint) and their MVNOs. The larger carriers have introduced a much quicker upgrade process, whereby it’s easier and cheaper for customers to upgrade to a newer device. People are happier to pay more per month if it means they’ll get more frequent new devices. The carriers are able to use their size and buying power with the handset manufacturers to offer deals that the smaller operators are unable to match. Another area where the smaller businesses struggle is incorporating LTE roaming deals: the bigger carriers are barely able to agree deals between themselves and are less agreeable to terms with a smaller carrier. It’s these smaller operators that typically offer customers a cheaper deal in the lower cost space, where the customer brings his or her own device. We’ve already seen the smaller businesses suffer; Cellular One is shutting down part of its networks in Montana and Wyoming, Cincinnati Bell is closing the network in February. Other smaller networks have been bought by bigger companies, for example MetroPCS was acquired by T-Mobile and Leap Wireless by AT&T. Hopefully, Simply Prepaid is the start of more support from the larger operators for their MVNO operators.