Sprint Nextel set to fold Common Cents prepaid brand

UPDATED: Just days after further muddying its prepaid lineup, Sprint Nextel Corp. (S) is now looking to clarify the waters by combining two of its offerings into one. The carrier noted the move was part of its ongoing evaluation of its prepaid branding strategy.
The carrier’s traditional prepaid Common Cents offering will be folded into the PayLo offering through its Virgin Mobile USA brand in mid-May, with Common Cents customers being notified of the change late last month.
The Common Cents brand was launched last May as a traditional prepaid offering priced at 7 cents per minute and that was rounded down to the nearest minute. Text messaging was also charged at 7 cents per message sent or received. The service was offered through Wal-Mart Stores Inc. as well as through a dedicated Common Cents website.
A Sprint Nextel spokeswoman explained that Common Cents customers can still continue to use their Common Cents service as they have in the past and that the service will remain the same for as long as a customer’s current account remains active. Common Cents customers will also be able to activate a PayLo device with their service and continue with that pricing model.
The PayLo service currently offers rate plans that begin at $20 per month for calls that cost 20 cents per minute, text messages at 15 cents each, picture messages at 25 cents each, Web access at $1.50 per megabyte and a 90 day expiration date. Or for that same $20, customers can receive 400 anytime calling minutes, the same rates for messaging and data and a one month expiration date.
Sprint Nextel noted that the Common Cents brand was initially launched to fill the Wal-Mart sales channel, but that following the launch and success of the PayLo service, the carrier decided to put its marketing efforts behind the Virgin Mobile USA offshoot. The carrier added that some of the SKUs at the Wal-Mart locations have been taken up by the Beyond Talk offering from Virgin Mobile USA.
PayLo was unveiled last July, targeted at what the carrier said at customers that were looking to spend $20 or less for wireless service per month. The brand was initially targeted at retail locations, including RadioShack and Best Buy locations.
Sprint Nextel eventually added a higher-end pricing tier to the PayLo service that provided 1,500 voice minutes, 500 messages and 10 megabytes of data transmission for $30 per month without a contract. Virgin Mobile USA noted that the new plan targeted plan changes at T-Mobile USA Inc. that include a $30 plan with a bucket of 1,500 calling minutes or messages and 30 MB of data transmission.
Earlier this week Sprint Nextel announced that its Boost Mobile brand would begin offering Android-powered smartphones similar to what Virgin Mobile USA is offering, but at a lower price point. The carrier did note that the Virgin Mobile USA offering is targeted more at non-voice users with an unlimited data and messaging package starting at $25 per month, which also includes 300 voice minutes, while the Boost Mobile unlimited calling, messaging and data service begins at $50 per month.
Despite the increased similarities between the two brands, Sprint Nextel noted that they continue to attract different audiences. The Boost Mobile brand skews more male, urban and older, while the Virgin Mobile USA brand skews more female, suburban and younger.
Prepaid remains a strong driver for Sprint Nextel’s customer growth, having accounted for nearly 92% of the carrier’s direct net customer additions during the fourth quarter of last year.