Prepayd enters white-hot prepaid space with WiMAX data


The domestic prepaid space gained a new entrant today as Prepayd Wireless threw its hat into the ultra-competitive market touting no-contract services running across Sprint Nextel’s CDMA network and Clearwire’s WiMAX network.

The carrier, which is a sister company of prepaid credit card provider Bank Freedom, is offering plans beginning at $35 per month for unlimited voice calls, text messaging and 411 information services, up to $60 per month that throws in unlimited 3G and WiMAX data services as well as a GPS locator service. The 3G service runs across Sprint Nextel’s CDMA-based network. Devices that do not include WiMAX capabilities cap out at a $50 per month plan.

Prepayd notes that its data service is unlimited, though it reserves the right to cut off usage or throttle speeds if consumers get out of hand.

The company is offering a number of devices from HTC, LG, Sanyo, Samsung, Kyocera and Huawei, including smartphones running Google’s Android OS and Microsoft’s Windows Phone. Device pricing seems to slightly undercut the no-contract prices offered by Sprint Nextel.

The price plans looks to be competitive against similar unlimited, no-contract offerings from the likes of MetroPCS and Leap Wireless as well as those from Sprint Nextel’s own prepaid offerings from Boost Mobile and Virgin Mobile. The main differentiator is that the Prepayd service includes access to the WiMAX network, which Sprint Nextel has said it was looking to include in its prepaid offerings later this year.

Sprint Nextel is a major stakeholder in Clearwire and has relied on that carrier’s WiMAX network for its own “4G” service offering. However, Clearwire has recently noted that it planned to forgo further expansion of its WiMAX coverage in favor of rolling out LTE-based services beginning next year.

Clearwire has struck a number of wholesale agreements for access to its WiMAX network, including FreedomPop and NetZero.

A handful of wireless operators, including Verizon Wireless, Alltel Wireless and U.S. Cellular unveiled new prepaid offerings earlier this week. MetroPCS recently adjusted its pricing plans that included data caps for its LTE service as well as bumps in pricing that should positively impact average revenue per user.

Analysts have noted that the prepaid space should remain hotly contested as carriers continue to fight over a segment that is yet to be fully penetrated and due to the no-contract underpinnings is ripe for cannibalization.

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Dan Meyer

Editor-in-Chief, Telecom Software, Policy, Wireless Carriers
Dan Meyer started at RCR Wireless News in 1999 covering wireless carriers and wireless technologies. As editor-in-chief, Dan oversees editorial direction, reports on news from the wireless industry, including telecom software, policy and wireless carriers, and provides opinion stories on topics of concern to the market such as his popular Friday column “Worst of the Week.”