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Apr. 16, 2010

WalMart is getting ready to sell its Straight Talk prepaid wireless service, and promises savings of up to $850 per year. And the retailing giant is starting a big nationwide TV ad campaign. The advertising effort likely will bring even more attention.

It will almost assuredly bring more pricing pressure as well to the flat-rate, no-contract segment of the wireless industry.

Verizon Wireless, which hosts the Straight Talk service, noted in its first-quarter financial results that it added around 1 million new customers to its network through its wholesale partners.

In the past, WalMart had been offering its Straight Talk service from American Movil subsidiary Tracfone Wireless since October 2009.

Now that the U.S.' largest retailer has seen how the product performs, it is ready to draw more attention, said Walmart spokeswoman Melissa O'Brien.

The advertisements, which feature families outdoors, are designed to appeal to value-conscious mothers, O'Brien said. While Walmart doesn't release any numbers on any of the products it sells, the Straight Talk offering has exceeded the retailer's expectations, O'Brien noted.

The advertisements do hint at some numbers with this phrase: “Join the over a million who have switched,” according to the ad, posted on Adage.com.

Walmart's Straight Talk initiative is different from its other wireless offerings for a number of reasons. First, the agreement is exclusive between Tracfone and Walmart. Even more surprisingly, the effort marks the first time Verizon Wireless has allowed a prepaid company to use its name in marketing efforts.

But the Verizon name isn't mentioned in the TV advertisements. That's not unusual.

When Tracfone announced its Straight Talk service in 2009, Current Analysis assessed the product offering this way: “Straight Talk is still an unknown brand, which will limit its appeal. Not until it is largely proven and pushed in the media, virally and through first-hand satisfaction, will Straight Talk see any accelerated adoption.”

Straight Talk offers unlimited calling, messaging and some data usage for just $45 a month. The price undercuts most unlimited calling offers, however.

It seems Walmart's decision to highlight the product through a TV advertising campaign is likely to bring it the media push Current Analysis said was needed.

Straight Talk is offered on a handful of LG and Samsung handsets at Walmart, ranging from just $30 right up to $129.

Walmart continues to sell other prepaid offerings from other competitors as well, O'Brien noted, adding that wireless users who are near the end of their contracts can now compare a variety of different pricing options and plans at Walmart stores in the U.S.

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Source: WalMart.