November 29, 2010, 2:49 PM —
Generally, pre-paid cell phone options haven't had a great reputation. Regardless of carrier, the available handsets to be entry level basic phones or basic feature phones. Although contract-free, airtime is usually sold by the minute at notably higher rates than post-paid service.
Earlier this year, Sprint began changing the landscape of pre-paid service with its Virgin Mobile and Boostmobile brands. The company began offering smartphones and 3G data service for customers on both brands. Both brands offer the BlackBerry Curve 8530 (which has been available on Sprint for about a year) and Android phones (the Samsung Intercept on Virgin and the Motorola i1 on Boost). In the case of Virgin Mobile, the company also offers a USB EVDO modem and MiFi card.
Of course, purchase of each device is at an unsubsidized price as there is no contract, but isn't astronomical either. On Virgin, for example $249 will get you either the BlackBerry or Intercept while the MiFi card goes for $149 and the EVO modem for $99.
As far as service goes, Virgin offers a handful of monthly pre-paid plans for smartphones that includes unlimited data beginning at just $25 per month (voice minutes differentiate the plans ranging from 300 minutes at the $25 level to unlimited for $60) and Boost simply offers a $50 plan for unlimited voice and data.
Sprint's approach here is pretty unique for a U.S. mobile carrier. The company is offering decent smartphones (not the greatest, but certainly usable and recent releases). Right now, there is no pre-paid smartphone market. This could work out well for Sprint if it can create and cater to that market. For people who have been wanting a smartphone but don't want to (or can't) sign a contract, this is a perfect option.
Note: You can purchase a pre-paid SIM from some carriers and use it with any unlocked GSM phone, including a smartphone. However, few carriers provide any data service with such packages. The Walmart Family Mobile branded T-Mobile service is a notable exception, though data is pretty limited.
Focusing on just contract-free component of this approach misses the more big picture. The most interesting thing is that Sprint isn't just catering to the traditional pre-paid customer. The monthly plans are actually pretty competitive with other carriers. The lowest Virgin plan at $25/month is $30 cheaper than the lowest combination of voice and data for an iPhone on AT&T, for example – and it includes unlimited data (albeit with reduced call minutes, though the unlimited options from either brand beat AT&T across the board).
Contract or no contract, these plans are really competitive and serious options (as long as you're okay with a somewhat limited choice of devices).
Even more compelling is the Virgin Beyond Talk plans that offer a flat rate mobile broadband ($10 for 100MB for 10 days or $40 per month for unlimited data, which will likely be the default choice for most users) for non-phone devices.
One reason I (like a lot of others) avoided buying either an EVDO modem or MiFi card is that while I do travel a lot, I don't do it every month and paying for service over a stretch of two or three months where it isn't used was off-putting. But, giving users the option to pay for only the weeks or months that they need mobile broadband changes the playing field and it is an incredibly wise move on Sprint's part. It creates a new market for business users and others who travel only occasionally. The modest price for unlimited monthly service makes that control even more attractive. It's no wonder, Virgin's MiFi card landed at the top of MacWorld's list of best gifts for Mac business people.
I'm sure the question you're asking at this point is: but how's the service?
Having picked up the EVDO modem last week in anticipation of holiday travel (followed by several business trips over the winter) and really put it through its paces, I can tell you its really good. Despite the inclination to think it would be inferior because of its contract-free, lower cost aspects, the service has been on-par with other devices I've seen. It's perfectly fine for web browsing, email, chat, and other basic Internet tasks. It can even handle streaming media fairly well. In my house, various speed tests placed it about the same as a mid-level DSL line (obviously location and coverage conditions mean this will vary). Overall, I was impressed with the service and the ease of setup – not to mention the pricing.
It's difficult to say what all of this means for the mobile industry as whole. But, it definitely looks good for a broad range of consumers and even some businesses – both in terms of smartphones and, perhaps more important, mobile broadband.
What do you think? Do Virgin's Beyond Talk plans seem like an ideal mobile broadband solution? Are the rate plans compelling enough to consider Virgin as your carrier? Let us know in the comments.