Clearwire Finally Goes Simple: But is $50 a Month Too Little, Too Late?

October 31, 2011

It took them a long time to get there but Clearwire finally has the pricing strategy I thought the company should have gone with out of the gate: A simple, one-price plan for mobile or home service, $50 a month, with no long-term contract necessary. It’s easy to understand and easy to purchase (especially with devices priced as low as $39.99) but — is it too late to matter?

When the nascent national wireless broadband service from Clearwire first became available back in January of 2009, the company had a pamphlet with so many different pricing options (dual plans, mobile + home plans, etc.) that it was hard to write simply just how much the new service would cost. And then Clearwire compounded that marketing problem by changing plans and pricing as it rolled out new markets — all under some claim of “finding out what works.”

What works — what always works — is easy and cheap. I always thought Clearwire should have started out selling a $25 per month plan just to see how many people it could sign up. That might sound business-stupid but how is it any worse than the grand plans of former CEO Bill Morrow, which crashed and burned? Inside Clearwire there were reportedly some renegades who wanted to try out a low-cost no-contract pricing scheme but by the time the Rover puck concept finally got greenlighted it didn’t have a passionate executive backing it so it predictably floundered.

Even as late as a year ago January I still thought a simple two-tier plan from Clearwire made sense, especially to get ahead of the tiered-data plans that were coming from Verizon and AT&T. But nobody listened then and instead we got grand plans for Clearwire smartphones and Clearwire Kindles, which resulted in the great Clearwire-Sprint executive collision, which hasn’t worked out well for either company.

Now you have a Clearwire without any of the leadership that brought the ISP to life — former CEO Ben Wolff, who for many Clearwire originals remained the soul of the firm, resigned from the board last week — and with a withered operational budget that leaves Clearwire no choice really but to strip down its offerings to a simple $50 a month plan, no contract, no download limits. My bet is that a bunch of data-hungry types will snap up these deals and run their laptops and iPads off a Clearwire pocketspot for the next few years, loving the last real unlimited wireless data contract around. It’s just a shame this strategy wasn’t tried sooner, when the company had some marketing muscle to put behind it.

Is the Pay-as-you-go Cellular Future Already Here?

October 14, 2010

In the course of our discussion yesterday that was part of her column on new cellular pre-paid plans, financial wiz Jean Chatzky asked me a great question: Why would anyone need a 2-year contract plan anymore? As her post (and stories like the one I recently wrote for PC World) points out, with better phones entering the pre-paid arena, the allure of the “discounted” phone that you get with most 2-year contract plans may be rapidly fading.

Though big carriers like AT&T and Verizon love the postpaid plans (because they lock customers in to a predictable revenue stream) you may see the larger providers offer even more flexible pricing plans in the near future, especially as they roll out their newer, faster “4G” networks. While the big boys may not be able to match their upstart competitors on price, at least customers will have more chances to switch between providers when not locked in to a long-term deal. For most everyone who can survive without an iPhone, that’s good news.

Next week at 4G World in Chicago we are scheduled to meet with both Clearwire and MetroPCS, both of which have pre-paid plans already using their respective 4G networks. It will be interesting to hear from the companies how the 4G prepaid plans are doing so far, and if there are more in the works for the near future.

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