Combining Aio, Cricket Prepaid Brands a Significant 'Challenge' for AT&T

By Kimberly Koerth Comments
Posted in News, Prepaid, Wireless, AT&T, M&A
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AT&T may have closed its acquisition of Leap Wireless dba Cricket Communications, but the work to keep customers and attract new ones to its new prepaid brand is just beginning.

The communications giant spent $1.2 billion for Leap, nabbing 5 million Cricket customers in the process. That means its Aio Wireless brand, which is less than a year old, is going by the way side, to be integrated into Cricket.

AT&T will offer a device trade-in credit program to move Cricket's CDMA customers onto its GSM-based network. The carrier also says it will honor Cricket's roaming agreements as long as the CDMA network remains in operation.

Dallas-based AT&T will maintain Leap's existing rate plans for its existing customers until they upgrade their device, choose another plan, switch to AT&T's network or until it shutters the CDMA network. And AT&T will offer a prepaid plan for at least 18 months that includes unlimited voice, texting and data for $40 per month.

Aio and Cricket have targeted different types of customers, which is creating some work in AT&T brainstorming sessions.

“AT&T's challenge here will be in combining the traditional prepaid demographic of Cricket with the more midmarket, no-contract customer its Aio brand pursued," noted Yankee Group senior analyst Rich Karpinski, commenting specifically on a FierceWireless article. "They’ll also have to convince existing Cricket customers not to churn away, but rather purchase a new device that will work on AT&T's 4G/LTE network. That network and customer transition will happen over 12-18 months, making it a fairly unforced upgrade window for most Cricket customers, but one not without risks. That's plenty of customers in play in a no-contract space where loyalty by definition isn't given in two-year increments but earned every billing cycle — leaving us to watch the shifting sands of prepaid market share very closely in 2014."

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