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Aug. 2, 2009

Boost Mobile said late Friday that it isn’t going to get into the wireless price war nonsense, even though most of the other players are doing it.

In June, TracFone Wireless started offering its Straight Talk service for just $45 a month. Thursday, MetroPCS announced a $40 unlimited, no-contract plan that went on sale yesterday.

Amid all the hussle and bustle, even Virgin Mobile USA has unveiled its $50-only plan. And the list is growing almost every day.

Kelly St. Julian, chief service officer at Boost says "we are definitely NOT getting into the price war. Period."

Boost may not have a reason to further drop prices right now. In the second quarter, Boost had 777,000 net new customer additions, up from the 674,000 net adds in the first quarter. Additionally, J.D. Power and Associates just announced that Boost was placed third in overall prepaid customer satisfaction, behind NET-10 and TracFone but ahead of rivals MetroPCS and Leap Wireless International/Cricket Communications.

Boost is a prepaid wireless carrier that previously broke the record of net adds in the fourth quarter of 2005. As for TracFone’s Straight Talk plan, Julian said it’s unclear how much Verizon Wireless is supporting the offer or how long it will last.

In a conference call with analysts earlier this week, Verizon Communications President and COO Denny Strigl described the Verizon brand on Straight Talk packaging as a six-month trial whereby the brand could be pulled at any time.

Boost hasn't had a problem with mobile phone trafficking to the degree that others in the prepaid space have experienced lately. Motorola, in part through software upgrades, has been a “great partner” in making sure problems don’t crop up, according to St. Julian.

Trafficking is more of a challenge in the GSM world, where SIM cards are used, than for iDEN. Motorola supplies Boost’s iDEN handsets.

St. Julian called Metro’s $40 price offering an interesting choice given the timing and added that price alone isn’t going to attract customers, least not yet.

In the J.D. Power study, Boost’s numbers went up and it got five stars, while Metro’s went down and it got only two stars.

“We’ve been in this game for a long time, seven years in fact, and our performance is resonating and people see the value in it for what it truly is,” she said.

In April, Boost experienced problems in meeting the text messaging capacity that customers required, but says it has since made serious investments to bring that up to par.

Overall, phone trafficking has been a problem for Virgin Mobile USA, but Boost executives aren’t commenting much on that entity while the acquisition is in the works...

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Source: Boost Wireless.