Telecom & Wireless
RadioShack Ventures into No-Contract Wireless Market with Cricket (RSH, LEAP, AAPL, VZ, T, S)
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RadioShack Corp. (NYSE: RSH) is at the point that the electronics retailer probably is willing to sell whatever product service will bring people in the door to its stores. The news today is that RadioShack is partnering with Leap Wireless International Inc. (NASDAQ: LEAP) to launch a RadioShack no-contract wireless offering powered by Leap’s Cricket Communications.
The line of no-contract phones will be available to mobile customers at RadioShack stores nationwide beginning Wednesday.
The press release noted:
This strategic collaboration represents a new choice in mobility and illustrates how both RadioShack and Cricket are dedicated to providing the right phones, the right features and the right plans to meet their consumers’ needs.
RadioShack’s No-Contract Wireless line-up will include some smartphones as well as a well-equipped feature phone. The Huawei Mercury Ice and the Huawei Pillar will be available in-store starting this week, with two additional phones expected to be available by the end of September. The Huawei Mercury Ice is exclusive to RadioShack for the next 30 days at $149.99 and is an Android 2.3 phone powered by a 1.4 GHz processor at a price of $50 a month with an unlimited data plan. The Huawei Pillar is priced at $39.99 with service plans that start at only $25 a month.
Cricket’s Muve Music will be available on all RadioShack No-Contract Wireless phones, and that service offers unlimited full-song downloads from a catalog of millions of songs that are at no additional cost. Cricket was quoted saying:
Now RadioShack customers can experience Muve Music and the unlimited music platform it provides on their phone. Wireless customers are looking for top-quality devices, service plans that fit their needs and entertainment, all at a great value, and we’re pleased to help bring these products to RadioShack customers.
Feature phone plans start at $25 a month for 300 minutes plus unlimited messaging and Web access, or a $35 per month service plan offers 1,000 minutes plus unlimited messaging and Web access. Smartphone plans start at $50 a month and include unlimited data (1 GB at full-speed), unlimited minutes and domestic text messaging plus unlimited music with Muve Music. A second service plan at $60 per month offers unlimited data (2.5GB at full-speed) with unlimited minutes and international text messaging plus unlimited music with Muve Music.
No mention of the Apple Inc. (NASDAQ: AAPL) iPhone was made here in RadioShack’s new no-contract plan. This is important because RadioShack does offer the iPhone under its existing plan offerings. Cricket also now offers an iPhone plan on a no-contract basis. RadioShack sells plans under Sprint Nextel Corp. (NYSE: S), AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ).
Wall St, does not seem to think that Main Street is going to jump all over this offering. RadioShack shares are down 1.1% at $2.40 and Leap shares are down 1.6% at $5.38 so far this Tuesday morning. Maybe the real fear is that this offering may just cannibalize ongoing sales for both companies.
JON C. OGG
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