The economy seems to be going OK for MetroPCS. The flat-rate, no-contract prepaid provider reported first-quarter gross additions of more than 1.5 million subscribers, which represents an increase of 59 percent over the first quarter of 2008.
MetroPCS ended the first quarter of 2009 with about 6.1 million subscribers, which includes net additions during the quarter of about 684,000 subscribers, representing an increase of 51 percent over the first quarter of 2008.
MetroPCS’ results appear to reinforce the idea that more customers are switching to prepaid as a result of the ailing economy. Analysts have been watching the prepaid market as consumers show signs of controlling their spending on wireless in a recession.
Traditionally seen as an option for those consumers with weak credit or low income, the prepaid market has been forced to innovate to compete in a tough economic environment. As a result, flat-rate prepaid is increasingly becoming a more mainstream option.
A New Millenium Research Council (NMRC) survey released in March was one of the first indicators of a trend toward penny pinching amongst cell phone customers. Previous surveys had shown that consumers would cut back on entertainment, even groceries, before they would reduce spending on their wireless service.
The NMRC survey stated that no fewer than 40 million Americans, or 26 percent of consumers with contract-based cell phone service, are “more inclined today than … six months ago to look at a way to save money on your cell phone bill, such as by switching
to a prepaid cell phone service.”
Additionally, the survey showed that if the economy worsened in the next six months, consumers were likely to cut extras such as texting and data plans.
In conjunction with its subscriber numbers, MetroPCS also launched GroupLINE, a one-call communication solution targeted at families and friends who are trying to save money by “cutting the cord” and replacing their landline phones with wireless phones.
The new service allows up to five MetroPCS’ Family Plan subscribers to receive calls on a shared GroupLINE number while still maintaining their individual mobile numbers.
GroupLINE is available for subscribers on MetroPCS’ Family Plan for an additional $5 per month.