Wal-Mart will be selling a no contract unlimited cell phone plan for $45. a month starting Oct. 18th.
My DH and I have never even had a cell phone ever but if the cost and quality improve we may just do it someday
I know we are behind the times but we have actually survived w/o one
Story
Wal-Mart Cell Phones: Unlimited Talk, No Contract
Sarah Mahoney, Oct 14, 2009 03:17 PM
mobile
Wal-Mart Stores wants to change the way America uses its cell phones.
The Bentonville, Ark.-based retailer says it is partnering with TracFone Wireless to launch Straight Talk, a no-contract cell phone plan. For $45 a month, users get unlimited minutes, texts and mobile Web use, and for $30, they get 1,000 minutes, 1,000 texts and 30MB of Web usage. Both plans also offer unlimited use of 411 calls.
Theoretically, the potential for Wal-Mart's offer is considerable: Some 75 to 80% of Americans already use cell phones, and churn is constant, with about 30% of users ditching their carriers in any given year, says Allen Nogee, principal analyst for wireless technology for In-Stat, based in Scottsdale, Ariz.
"Everyone is looking to save money," he says, "and while many people might be resistant to buying a TracFone -- they may worry that the coverage won't be as good as, let's say, a Verizon or a U.S. Cellular, for example -- the fact that Wal-Mart is putting its brand name behind the product may make a difference."
Wal-Mart says the service will be available at 3,200 of its stores beginning Oct. 18. "Straight Talk will bring to the market a new low price for no-contract wireless service," it says. The company says the average American is currently spending $78 on cell phone service, to receive 1,000 minutes a month. A switch to Straight Talk, it says, will save the average user $500 per year.
Phones range from the entry-level LG 220 flip phone at $39.98, to the LG Slider 290 at $79.98 to the Samsung 451 Qwerty keyboard phone at $99.88, and consumers may refill their monthly balances by buying refill cards at Walmart or by registering online.
Wal-Mart says it began testing the program -- a partnership with TracFone Wireless -- in 234 pilot stores last summer, and that results were promising enough to rush the program through in time for the holidays.
"Retailers have continuously been growing their influence in mobile phones," says Michael Morgan, industry analyst for mobile devices at ABI Research, who points out that Wal-Mart has been selling cell phones for some time. "Going to your Sprint or Verizon store isn't the only option -- you can go to Best Buy, for example, and look at many phones and plans."
Morgan expects Wal-Mart's phones to "be a moderate success." What's important, he says, "is that it is evening the playing field with an all-you-can-eat unlimited plan, which really appeals to some consumers." Most plans are so complex that there is no way the average consumer can be sure they have the best plan for the best price, so that simplicity is appealing. "And besides, there are so many other reasons consumers have to go to Wal-Mart, whether it's to go grocery shopping or hang around the food court."
But while the plan has obvious appeal for families with teenagers or people with credit problems, the $45 price isn't really a game-changer, he points out. "Boost Mobile has been out there for some time now with its $50, unlimited talk, text and Web packages, and it doesn't require a contract either. This isn't that different."
However, Nogee thinks Straight Talk's offer will put cell phone companies under considerable pressure, as consumers demand some kind of price breaks when it comes time to renew contacts. "We're moving toward a time when negotiating will be important, and we're seeing signs of some weakness in the major operators," he says. And while he doesn't see them lowering their rates, "they'll be more likely to throw in a phone or SMS messages for free to keep customers from leaving."
