Walmart, T-Mobile To Offer Discounted Cell Plans
Beginning this week, the new service — Walmart Family Mobile — will offer discount pricing without requiring consumers to pay in advance, sign annual service contracts or go through credit checks.
It "was designed to focus on families that want to stay connected but want to save money doing it," says Greg Hall, vice president of merchandising for Wal-Mart U.S.
Walmart Family Mobile customers will have unlimited talking and texting for $45 a month. Each additional line will cost $25.
Each Walmart Family Mobile user also initially can send and receive 100 megabytes of data. Walmart says that's enough to send 500 text-only e-mails, send 100 e-mails with photo attachments and view 200 Web pages.
In what T-Mobile USA COO Jim Alling calls "a major innovation," family members can share the data capacity. Also, those who use less than 100 MB can carry the balance over to the following month.
Once that 100 MB is gone, customers will have to pay extra for more data. Pricing will run $10 for 200 MB, $25 for 500 MB or $40 for 1 gigabyte.
Walmart doesn't own any cellphone towers. It is reselling service it buys wholesale from T-Mobile. Walmart already has a similar relationship with Verizon, reselling its service under the Straight Talk brand. The Verizon/Walmart plans, which are prepaid, also cost about $45 a month.
Others retailers may follow Walmart's lead to strengthen ties to consumers.
"The next likely participant is Best Buy," says Dan Hays, who directs the telecom practice at consulting firm PRTM. Mobile providers are interested in partnerships because "It's becoming clear that the network is no longer a major differentiator. It's about the brand, the devices and the services that are offered."
Hall says that Walmart will continue to offer multiple mobile phone services, although Walmart Family Mobile will be most prominently displayed in stores.
The service initially will be offered at about 2,500 Walmarts and to online customers. It won't be available directly from T-Mobile. Also, the Walmart-branded service won't be available in some parts of the country, especially rural areas, where T-Mobile doesn't provide strong coverage, Alling says.
The T-Mobile executive says that his company decided to work with Walmart even though the new service could lure customers away from T-Mobile's own services.
"While we will lose some (market) share on T-Mobile-branded (service), we know that this is going to take share" from other competitors, Alling says. He adds, "We have a broader range (of services) on the full T-Mobile brand."
The companies declined to say how many customers they expect Walmart Family Mobile to have in the first year.
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