Switching Cellular Services in 2021

 

It’s been over a decade since it has been propitious for me to “go mobile” with cellular services.  My household has remained with Boost Mobile because it offered the most bang for the buck with unlimited talk and texting along with a generous hotspot capability gratis.  The handsets were mostly one generation behind, but they were affordable for replacement, thus obviating the expensive and unsatisfying “phone insurance racket.”

Alas, there have been shifts in the cellular marketplace which prompt a change.  As a thrifty  android aficionado, I regretted that LG decided to leave the cell phone market in July as I owned several iterations of the Stylus.  I had not heard good reviews of the LG Stylo 6 and I hoped that its successor would be worth procuring, but in the US the LG Stylo 7 was not  to be released.  

Boost does offer a Motorola Moto Stylus 5G but it has a higher price point.   I was considering getting a Moto Power, which has most of the features, aside from the stylus and massive built in 128GB RAM, but for less than half the cost.  But handsets are not the only thing in flux.

When T-Mobile merged with Sprint in 2019, federal regulators required the merged company to spin off Sprint’s house MVNO Boost Mobile so that there would be a viable fourth major cell competitor and lessen the likelihood of monopolistic price gouging.  

After some ado, Dish Network acquired Boost Mobile and the feds required T-Mobile to provide seven years of network sharing which would allow Boost could build its own celllular network. Prior to he merger, Boost relied on Sprint’s CDMA old network; however, T-Mobile relies on GSM networks (like much of the world).   Even though the trend amongst cell providers is to create 5G networks, it takes time to transition, especially for Dish’s Boost Mobile as it needs to start from scratch.  

T-Mobile decided to scrap the old CDMA 3G networks.  T-Mobile had sought to decommission the old CDMA network by the end of 2021.  But in pointed T-Mobile press release from  October 21, 2021, it announced that it was delaying the CDMA sunset until March 31, 2022 because its partners had not sufficiently followed through on customer migration to the new network.  Boost Mobile claims the tardy telephone services are post paid and not pre-paid like Boost. 

Despite the network sharing agreement, it requires new SIM cards for Boost’s “Expanded Network” which essentially means switching to 5G capable network.  Some Boost i-Phone customers, may just be able to upgrade their SIM cards.  But for the rest of the low budget customer base, that means new handsets. Although Boost Mobile offered some discounts, they are not remarkable incentives.

Despite being longtime customers, our loyalty is being shaken by provisions when switching from Boost’s “Nationwide Network” (CDMA) to “Extended Network” (a.k.a. GSM towers).  Aside from basically requiring new handsets for Android customers, whenever a retained customer Boosts up to the new network, they must join a new plan.  

Well we have a heritage Family Plan that was grandfathered in at two lines with unlimited talk and text and unlimited (really around 32 GB) data plus 12 GB separate of hotspot data for $80 a month flat (no extra taxes or fees).  It was not clear if two person family plans are available on the “Expanded Network”.  This could mean a $20 “boost” to our bill. 

After several frustrating webchats, a Boost CSR shared a webpage which indicates that a customer can change family plans, which presumably would extend into the new Extended Network.  But this information is contradicted by fine print on Boost’s webpage and frankly many opinions which contradict each other impeaches confidence in this assertion. 

So I considered other carriers.  The major carriers like Verizon, T-mobile and AT&T supposedly have migrated away from iron clad two year contracts with substantial early withdrawal penalties (up to $350).  Instead, this system has been replaced with expensive phones with installment plans over 22 to 36 months, which makes handsets seem so much more affordable, although this is on top of the cost for your phone plan. Taxes needed to be paid up front for the full value of the handset.  Moreover, if a customer switches before the phone is paid off, their contract is only released if the balance is paid off.  On the bright side, at least one can keep the device, but at a high price.

Then I looked at the pre-paids, which are MVNOs (Mobile Virtual Network Operators), which tend to offer good value for money, albeit with some cost cutting.  These savings can derive from not having brick and mortar stores, significantly automating customer contacts, offering older model new phones or encouraging customers to bring their own devices.   Boost is an MVNO which offered curtailed customer service and prior generation devices.  Now that Boost is switching to GSM, it seems that they may be dissuading data driven current customers from remaining to bring in new blood which is interested in inexpensive cellular plans that have less data attached to it.

As this analysis is being written, MetroPCS, a MVNO subsidiary of T-mobile since 2013, has an aggressive pricing plan to lure Boost Mobile and Cricket Wireless customers by offering a $25 a month cellular plan with unlimited talk, text and smartphone data.  This is half the cost of the comparable Boost Mobile plan.  The major difference is that Boost offers a hotspot whereas MetroPCS does not. Plans with hotspots start at $50 with an additional $20 a month surcharge.

To sweeten the deal in switching from Boost or Cricket, MetroPCS offers a free phone, a Samsung Galaxy A32 which on paper has good specs (6.54" screen, 64 GB internal memory, 4 GB ROM, and a 5000 Mah non removable Lith io battery, a quad rear camera with 48/8/5/2MP).  Boost Mobile offers this for $139.  

Frankly, I have my eye on the Motorola Stylus 5G, which has 218GB internal memory but otherwise similar specs for an additional $19.99 with the switch from Boost, whereas Boost Mobile wants $199 for the same handset.

To be fair, Boost is trying to retain customers with the Celero 5G for $49 online if one is invited (actually it rings up at $89.99).  The specs look good but there are some real question marks. Even in pre-order it seems out of stock, yet Boost will immediately charge the customer. Aside from the less discounted price, the manufacturer is not known, so it is buying a pig in a poke (but from my poking around, it’s FCC filings stem from Wingtech, a Hong Kong based company).  If my memory serves correctly, some handset providers from that area had problems with customers’ personal information surreptitious being sent to the Middle Kingdom. No thanks.

Boost Mobile consistently offers contradictory information about those switching to the Extended Network both in stores, on the website and through website chats.  It seems that the emphasis is to sell new handsets, even though the mid and lower priced models are two generations behind competitors, and push their BoostUp program which effectively locks customers in for 18 months.

From a market analysis standpoint, T-mobile through its subsidiary MetroPCS is leveraging its size with loss leaders (such as heavily subsidized handsets and half priced cellular plans) to drive away Boost customers.  This move may deprive DISH Network from having ample capital to build its own 5G network during the remainder of the T-mobile network sharing.  In doing so it may stifle Boost’s nascent attempts to become a fourth major US cell carrier.  

The handsets which MetroPCS has deeply discounted may not be the latest and greatest phones, but they provide plenty of value for money for most customers.  For my desired phone, it would be $180 savings vis-a-vis Boost Mobile website (or $226 via the BoostUp option).  And MetroPCS’s  presumably temporary promotion pricing would save a consumer $720 over two years. 

It is wise to consider what features cellular plan or a handset are crucial when discerning a cellular choice.  My household has prized hotspot tethering because we are often traveling to a place that has no household internet.  That may give Boost an edge.  But there are economic alternatives.  Rather than opt for a pricier plan with MetroPCS, one account could stay with Boost and share the signal while traveling.  There are also cheap prepaid carriers which are al a carte and could be turned on and off when tethering data is needed. There might also be other ways to achieve the occasional objective.   But saving $30 a month for two years is appealing to a thrifty techie.  And good customer service is priceless.  

Shifting Spectrums in the US Cellular Industry

Although the radio waves are not physically realigning themselves, cellular companies have been to stead themselves for the future.

T-Mobile, which escaped from an AT andT acquisition by the FCC blocking the merger, grew by acquiring MetroPCS.  Although the “T-Metro” merger added 9 million subscribers to the  Deutsches Telekom holding company’s 34 million base, it remains the fourth  largest US cellular company.  But size isn’t everything.

T-Mobile did not acquire MetroPCS just to grow. T-Mobile wanted the MetroPCS spectrum.  Currently, MetroPCS is a CDMA carrier.  T-Mobile plans to phase out CDMA by 2015 and migrate customers to a HPSA+ system, which is not considered problematic as 60% of MetroPCS switch handsets each year.

 But T-Mobile USA will then utilize that spectrum for 4G LTE service.  This is crucial as currently T-Mobile boasts that their plans have “Full Speed LTE *”, however if you read the fine print, it is only for the first ½ Gigabite, then the data is throttled down to "Edge"-like 2G speeds. In a data hungry consumer environment, this is not real enticing to those who have graduated from feature phones. Perhaps Metro-PCS’s could help a bit in data coverage, as T-Mobile’s data coverage is scant outside of major metropolitan areas, and who has the patience for 1G connections?

What remains to be seen is if T-Mobile USA will support the agressive Metro-PCS plan to have Voice over LTE (VoLTE). Some industry speculation is that T-Mobile USA will wind down MetroPCS VoLTE naturally over a couple of years as customers shift to GSM/HPSA+ handsets.  Then T-Mobile USA would roll out their own VoLTE platform.  But will that be too late?

The 78%  acquisition of Sprint by Japanese Softbank for $21.6 billion  was delayed until this June 2013 to allow  Sprint completed its acquisition of the remaining 50% of Clearwire.  There was a clear synergy when Sprint’s 4G service was premised on Wimax like Clearwire.  But Sprint clearly wanted Clearwire’s spectrum.  Clearwire’s bankruptcy would have forced Clearwire to auction its large spectrum holdings and left it’s partner Sprint with worthless holdings.  In an auction environment, deep pocketed cellular rivals Verizon Wireless and ATT would have cost Sprint more to acquire the up for grabs spectrum rights.  So the $7 billion acquisition cost for internet wholesaler Clearwire made sense.  Now Sprint can allocate the 160 MHz of spectrum to bolster the third ranking US cellular provider’s  LTE data roll out.  The added spectrum may allow Sprint to be a cellular mecca for truly unlimited data consumers.

One might wonder why AT and T  was willing to pay $1.2 billion to acquire Leap Wireless subsidiary  Cricket Wireless?  AT and T  had just launched IO pre-paid phone subsidiary so it did not need another Mobile Virtual Network Operator (MVNO).  Cricket only added 5 million subscribers to second largest US carrier’s 96 million subscriber base.  So why did AT and T  pay nearly a 90% premium for Leap Wireless stock?  Clearly, the answer is spectrum.  Cricket has a 60% under-utilization of spectrum.  After the FCC blocked the ATT-T-Mobile merger in 2011, AT and T was hungry for spectrum.  Sprint’s completion of the Clearwire acquisition denied other opportunities for cheap spectrum.

While it is only anecdotal, there was a marked migration from AT and T after the carrier lost I-Phone exclusivity in 2011 was data coverage.  Recent speed tests showed that AT and T’s 4G LTE network was speedier than Verizon Wireless, but Verizon’s LTE footprint is much larger.  Gaining more bandwith may allow AT and T to broaden its LTE coverage with an added benefit of gaining another prepaid distribution network.

Cellular consumer activists, such as Harold Feld of Public Knowledge, condemned the proposed AT and T acquisition of Cricket Wireless, claiming that AT and T already has enough wireless capacity and thinks that low-income and poor credit customers would be adversely effected.  Perhaps it should not be surprising in the class envy age of Obama when community organizers dictate when companies "have enough" and should pay "their fair share."  But such animus is disconnected from reality.

Carriers seek more spectrum to keep up with customer demands.  The cellular industry has shifted from stingily selling voice minutes to essentially making them ubiquitous, but carriers make their money on data.  Verizon Wireless hopes to shift all of its voice calls to VoLTE by the end of 2014 as it is a more efficient conveyance of voice calls and then use the freed up spectrum to meet data needs.

In the MVNO market, Ting, FreedomPop and TextNow are set to offer extremely inexpensive cellular service which is made possible by employing VOIP (and VoLTE) technology.  Such services are built upon the backbone of excess capacity from major carriers (e.g.- Sprint).  Certainly, community activists should take cheer from the fact that these aspiring cellular carriers allow for Bring Your Own Device (BYOD) from older Sprint smartphones with clean ESNs, which is green and cost conscious.  Walmart's Straight Talk cellular service can give a second life to AT and T and T-Mobile GSM phones and old Verizon CDMA handsets. 

Sprint owns both Virgin Mobile USA and Boost Mobile, which have full smartphone services at half of the end cost of their parent company, albeit demanding pre-payment.  Then Sprint has Pay-Lo which offers very inexpensive Voice and Texting feature phones (dumb phones)  with limited cellular web access.  And of course, Assurance Wireless  et ali. provides the Obama-phones to provide cell service to those below the poverty line.  So do-good NGOs like Public Knowledge should not be worried that the poor are being underserved by the cellular industry. 

Even as the cellular industry figuratively shifts towards data spectrum, most consumers just care about getting a new handset and give little consideration to the details of a major household expense--their cellular bill.