Tuesday, October 8, 2013
Target enters prepaid wireless fray
Discount chain store giant Target Corp. is taking on its rival Wal-Mart Stores Inc. with a prepaid mobile phone scheme called Brightspot. The move sets up Target to partake in the growing prepaid wireless market, which is expected to surpass $25 billion in 2015.
The service plan for Brightspot starts at $35 per month for unlimited talk and text, while Wal-Mart offers a comparable plan of $45 on its Straight Talk prepaid mobile program, but with unlimited data added into the mix. As an incentive to keep customers using the plan, Target will offer customers a $25 gift card for every six months they remain on the plan, which works out to a savings of approximately $4.17 per month. Additionally, users of Target's private-label REDcard will receive a 5 percent discount off the Brightspot plan.
In a report issued April 2011, Boston-based consultancy Atlantic-ACM said the prepaid telecom market would reach $25.3 billion by 2015, up from $19.3 billion in 2010. "From the customer's perspective, prepaid service and feature offerings are looking increasingly like postpaid offerings," said Atlantic-ACM President Fedor Smith. "As a result, postpaid subscribers are increasingly being drawn to prepaid services by competitive rates and the absence of long-term contracts."
In the 10th Annual U.S. Closed-Loop Prepaid Market Assessment, released in August 2013, Mercator Advisory Group said that the prepaid long distance market is in decline as consumers turn away from landlines and toward cellular phones.
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