Walmart to offer low-cost wireless service across the U.S.
Filed under: Company News, Technology, Wal-Mart Stores, Verizon
There hasn't been this much action in the mobile phone space since Gordon Gekko plotted his moves on a cell phone the size of a brick. The latest disruptive news comes from Walmart (WMT), of all places, which has announced plans to offer low-cost mobile service. Starting this Sunday, the big-box retailer is launching a pre-paid wireless service called "Straight Talk," which offers a $30 or $45 prepaid monthly plan available at more than 3,200 Walmart stores nationwide. The plans offer cell phone service at a major discount to existing mobile calling packages. To wit: the $30 monthly plan includes 1,000 minutes, 1,000 texts, 30MB of mobile Web access, and nationwide coverage. The $45 monthly plan includes unlimited minutes, texts, mobile Web access, and nationwide coverage.
"By switching to the $30 Straight Talk plan . . . the average 1,000 minutes-per-month consumer could save more than $500 per year and still be on a reliable nationwide network," Walmart said in a statement.
That sound you hear? Executives at T-Mobile and Sprint losing their lunch.
Walmart decided to launch the service after a pilot
"It has been very encouraging to see the excitement and response to the Straight Talk pilot in 234 stores that began last summer at Walmart," Greg Hall, vice president of Walmart's Media Services said in a statement. "In light of the savings customers continue to need, we have worked very quickly to extend this offering to all of our Walmart customers nationwide, and just before the holidays."
Walmart is developing the service with TracFone Wireless, a U.S. subsidiary of billionaire Carlos Slim's Mexican cellphone giant America Movil, which claims more "no-contract" cell phone customers than any other carrier in the U.S. The service will run on the network of Verizon Wireless, the U.S. mobile market leader. Verizon Wireless is a joint venture of Verizon Communications (VZ) and Vodafone Group Plc.
Industry analysts said Walmart's move, along with other low-cost market entrants, could prompt a price war in the mobile market. "It raises the risk of an industry-wide pricing war," Soleil/Nelson Alpha Research analyst Michael Nelson told Reuters. "This clearly represents increased competition for the entire wireless sector and in particular for the unlimited pay-in-advance segment," Nelson said, referring to the new Walmart offering.
Both Verizon and AT&T, the No. 2 U.S. mobile service, have maintained that they have no need to compete for what the conventional wisdom holds is the dregs of the market: low-cost, prepaid phones. "Now with the nationwide expansion of the service through an extremely powerful distribution channel of Walmart, it certainly raises the risk profile of the unlimited pay-in-advance segment," Nelson said.
Smaller players like T-Mobile and Sprint have already joined the fray with offerings from MetroPCS and Boost Mobile. "The risk for Verizon and AT&T is what kind of aggressive response we're going to see from T-Mobile and will that have a ripple effect throughout the industry," Nelson said, adding that there is a risk that the new service could cannibalize some of Verizon Wireless's higher paying customers.
"What's different this time is that total industry subscriber growth is significantly decelerating so incremental opportunities are much more limited," the analyst said.



























Reader Comments (Page 1 of 10)
10-15-2009 @ 2:12PM
jerry scott said...
Now all we need is for Wal-Mart to offer cable TV service to cut down on the outrageous fees charged by local providers. When I first had cable in Va. (1984) it cost $33 a month. Now its over $100 with one HBO channel added. Could Wal-Mart possibly compete in this market and give us a break? I might add High Speed Internet also...why not? Go Wal-Mart.
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10-15-2009 @ 5:07PM
Sherry said...
Ditto!
10-15-2009 @ 5:53PM
Andrew said...
Aw, but then Wallstreet wouldn't be able to make obscene $$ while the rest of us starve
10-15-2009 @ 8:18PM
mslataprada said...
Very Good Comment--I laughed--I like
10-18-2009 @ 6:19PM
Milo said...
Ah, but what was the worth a dollar in 1984? I'm not sure if you've noticed, but just as the cost of living has been increasing, so has your salary. Minimum wage certainly isn't the same as it was in 1984. Yes things are more expensive, but you've been making more too. But I wouldn't expect someone who shops religiously at and cheers for Walmart to know that.
10-19-2009 @ 12:15AM
Connie said...
I completely agree Jerry! We started out paying $24 a month in Branson many moons ago...now we pay over $120 a month and have NO premium channels, that is strictly cable tv and the slowest cable internet I've ever seen! People complain about Walmart, but not me, they help the community more than any company I have ever seen, they are environment friendly, and I can actually afford to buy groceries and clothes shopping there! Walmart, are you listening? Can you take over the Cable TV world too? lol
10-15-2009 @ 2:14PM
Mya said...
I think this is an outstanding idea and hope it's successful. Currently is appears that Verizon has a monopoly on the phone service as MA Bell did years ago. I detest calling them because it's always at least a 1 hour wait and then you get transferred from dept to dept. It's not a fun experience. Competition is good! and very much needed in the insurance industry.
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10-15-2009 @ 6:57PM
V said...
you obviously didn't read the article... walmart's "service will run on the network of Verizon Wireless, the U.S. mobile market leader"
10-15-2009 @ 8:41PM
Mrs B said...
At least Ma Bell provided excellent service. Verizon sucks!
10-15-2009 @ 8:05PM
Amber11234 said...
EWWWW! JHON YOURE DISGUSTING! plus they deserve their own privacy.....NOT! thoes people have problems!!!!!
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10-15-2009 @ 2:44PM
Jodi said...
I wonder if they will offer some kind of family plan as Verizon does (like the $9.95 each add'l line). I think this is a great idea for Wal-mart customers because it is amazing what a cell bill can get up to if you happen to go over your minutes!! Their $45 plan is better than anything I have come across lately. I may have to switch......
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10-15-2009 @ 2:26PM
Dru said...
Finally...No contracts! Verizon, ATT, TMobile, and Sprint, Your time has come. May all your subscribers revolt and leave you.
I for one will be leaving ATT with my family plan with 5 lines and move to Walmart. Good for Walmart.
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10-16-2009 @ 12:29AM
steve said...
Unfortunately you didn't read the article well enough. Without Verizon this service does not exist, as it runs on Verizon's top of the line network. This actually validates Verizon as the best network. I highly doubt Wal-Mart would choose an inferior network to launch this service on. The only thing this will compete against is Verizon prepaid phones. This may be a move to try and extend the reach of that segment. Contracts will never disappear because without them you will be paying full price for phones. The average smartphone can run up to $600 at full price. There is a reason prepaid plans are not offered on top of the line phones. That reason being, that companies subsidize the cost of the phone and in return you sign a contract.
10-15-2009 @ 6:17PM
Kyra said...
...you do realize all of those companies you're so angry with for making you sign a contract...have had no contract phones for years, right? Some of them have different names for their companies with zero contract and unlimited minutes/texts but they're still the same company.
This "amazing deal" we're seeing from Walmart is only $5 cheaper than the average unlimited no contract phone service. Of course you would know this if you bothered to research things instead of blindly signing a contract.
10-15-2009 @ 2:50PM
SpikeG said...
Mya, Verizon is not even close to having a monopoly and if you are still using them they are certainly USING you. 9 out 10 times when I call AT&T I get an answer right away and the issue is resolved and they throw in an extra incentive to make me even happier.
This Walmart thing could be great and I am willing to listen but for now anyone but Verizon will do, especially ATT.
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10-15-2009 @ 5:20PM
gwobama said...
I have been with Verizon for fifteen years. I have always had good luck with them. I have four phones on my wireless plan. My one step-son decided to put the screws to me once. He moved out of state and I let him stay on my account as long as he agreed to pay his part of the bill monthly. To make a long story short, he ran the bill up over the minute limit. My bill ended up being $620.00 for the month. I called Verizon with my tale of woe about how my step-son put the screws to me. They forgave the bill. They actually wiped it clean and forgave the bill. I am sorry you had bad luck with them. Whenever I have called them here in Maryland, I never had to wait more then a couple minutes on hold.
10-15-2009 @ 10:29PM
Bob said...
Spike, I don't understand what you are talking about. I have had Verizon for 22 months now. I have NEVER had to call them. I can make changes to my contract, and did twice, by going on-line. I added limited text messages and then added unlimited text. I, for one, LOVE Verizon. I have never experienced a drop call. AT&T, from the research I did, is the worst company when it comes to dropped calls.
10-18-2009 @ 5:13PM
Ralph said...
I don't agree with you man. Verizon has been awesome for me over the years. Customer service is better than anyone I've had before and drop out zones are near zero.....unless you're in like Wyoming or North Dakota or something and even there there is great coverage in the populated areas. The prices are a little high but, who isn't other than the prepaid services? I for one am happy to see Verizon team up with Walmart. It just goes to show that Verizon has the best technical services around.
10-15-2009 @ 2:33PM
Maggie said...
The mobile service by Wal-mart sounds good. We travel in our RV and spend alot of time at Wal-mart. WIFI for the computer would be a tremendous boost for the RV people. We don't just spend the night there, we spend alot of money in the store as do other RV'ers.
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10-15-2009 @ 2:32PM
Don said...
I heard that WalMart is also going to offer really cheap health care plans, too! The only thing is, you have to go the doctor or hospital in China.
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