A tiny Texas carrier is launching a second service market after apparently prompting price changes by Leap Wireless International Inc.’s Cricket service in its debut market.
Local wireless operator Pocket Communications Inc. is rolling out its budget-friendly unlimited calling service in Laredo, Texas, after kicking off service in San Antonio earlier this year. Pocket expects to publicize the offering during official launch events at two store locations early next month. The company said it has begun hiring staff in Laredo, and initially plans to bring on 50 employees.
Pocket offers two flat-rate unlimited calling plans and has been marketing itself as a common-sense alternative to traditional national carriers. Pocket’s advertising has featured a chimp taking a stuffy carload of cell-phone company executives for a wild ride.
The company’s Flat 28 plan includes unlimited regional voice minutes for $28 a month, with the first month free. Pocket’s Flat 37 plan, which costs $37 per month, includes unlimited regional and domestic U.S. calling, plus unlimited text and picture messaging. The company also has a 10-200 plan that for $10 a month gives users 200 anytime minutes, domestic long-distance, free incoming text messages and additional minutes billed at 10 cents per minute. The company requires no contract, credit checks or activation fees.
Pocket’s plans undercut Leap’s usual pricing on comparable plans, but the larger carrier has made some price adjustments in response to competitiveness of the market; those changes just happen to meet or beat Pocket’s offering.
Leap’s comparable plans were priced at $30 and $40, and those prices still stand in Leap’s five other Texas markets. However, in San Antonio, the carrier marked its offering down to $25 for basic regional calling and met Pocket’s $37 offering with a plan for all-you-can-eat messaging, local calling and domestic long distance. Leap also does not require a contract or credit check in order to activate service, and both are offering the first month of service free.
San Antonio “is very competitive across the board. All the carriers are represented here, and everybody has been very aggressive in building out their distribution and doing a lot of advertising,” said Cody Simpson, district director of the San Antonio market for Leap. The price changes were “in response to the overall competitive nature of the market” and reflected Leap’s “ability to remain nimble and remain aggressive and making sure that we’re providing the best value for the customers.”
Simpson said that Leap is focusing on its customers’ ability to roam in other Leap markets in Texas with an extended calling area included in plans at $40 and up, as well as the option to roam nationally in other Leap markets on a $50 per month plan. The extended local calling areas were expanded at about the same time as the price changes were made in the San Antonio market, Simpson said; the price changes went into effect in August.
Pocket said it will be selling service through more than 30 third-party retailers and that it will have four Pocket stores in the Laredo area. Leap does not offer service in Laredo.
“I’m extremely excited about our rollout into the Laredo market,” said Paul Posner, chief executive officer and owner of Pocket Communications. “We’ve been met with great enthusiasm for our low-cost, high-quality service in the San Antonio market. We expect people in Laredo also are ready to break the chains of `big wireless’ and try out a sensible cell-phone service.”
Posner said that Pocket is “advertising pretty much across the market and we think that our product is universally appealing,” rather than targeting a specific demographic.
Of the San Antonio market, Posner said Pocket is exceeding his performance projections, while Leap “is clearly struggling in the market here.”
He joked that Pocket had “run those rascals out,” then added more seriously that the new entrant’s overall market impact “is difficult to measure at this point. We haven’t been in business long enough.”
Posner is a 17-year telecom veteran who used to own a paging business, then started a company called Allegheny Communications in order to participate in spectrum auctions. He ended up buying spectrum assets during the telecom bust and a license from the former AT&T Wireless Services Inc. Since then, Posner said, Allegheny sold some of its spectrum blocks and is using the money to fund an expansion into the cellular business: Pocket. He recalled reading about a wireless company called Pocket Communications and liking the name; the old Pocket went out of business, the name changed hands a few times, and Posner acquired the rights to it a couple of years ago.
Allegheny did not participate in the most recent federal spectrum auction. Pocket’s CDMA network uses technology from Nortel Networks Ltd. and utilizes 10 megahertz of spectrum in the 1.9 GHz band. Pocket also has spectrum in the Northeast, Posner said.
Pocket also indicated that it plans to begin offering service in the Rio Grande Valley by spring. The Rio Grande Valley, located along the southern tip of Texas and the Mexican border, includes McAllen, Harlingen and Brownsville.
