The hugely competitive US prepaid market is expected to become even more cutthroat following news yesterday that Wal-Mart, the world’s largest retailer, is to expand its mobile services nationwide. Its Straight Talk service – developed with TracFone Wireless, the US unit of Mexican giant America Movil – will be offered from 3,200 stores from October 18. Straight Talk is available as a US$30 monthly prepaid plan for 1,000 minutes and 1,000 texts, or US$45 per month for unlimited calling and texts. The nationwide rollout, in time for the lucrative holiday season, follows a pilot in 234 stores last summer.
Wal-Mart’s move will pose serious competition for US operators MetroPCS and Leap Wireless, two large regional prepaid players responsible for pioneering the ‘hybrid’ mobile subscription model; a combination of a contract and prepaid plan that offers a monthly allowance of voice and data (like a postpaid account) but is paid for upfront and without a contract (like a prepaid account). The US prepaid market is also undergoing consolidation, with Sprint Nextel in the process of buying Virgin Mobile USA for US$483 million.