Sprint's Boost Mobile Strategically Intros LTE Smartphone

Boost Mobile will begin selling two LTE-enabled smartphones March 7 that may help Sprint in the increasingly competitive prepaid market.  

Sprint's Boost Mobile brand, competing in a fast-growing but increasingly crowded contract-free market, will begin selling the HTC One SV and the Boost Force March 7. Both phones offer access to Sprint's growing 4G Long Term Evolution (LTE) network, at Boost's monthly rate of $55 for unlimited service.

With time, the monthly fee can potentially fall to $40—for every six on-time payments a customer makes (they don't need to be consecutive), Boost Mobile knocks $5 off the monthly rate.

While Sprint isn't the first to pair LTE speeds with prepaid rates—MetroPCS has been doing so since 2010—Sprint's positioning of LTE is unique, Ovum analyst Sara Kaufman said.

"Sprint's approach reinforces the idea that the LTE proposition is about cost savings rather than revenue generation," Kaufman said in a Feb. 26 statement. "Sprint is attempting to leverage this idea as a differentiator for its prepaid customers by offering LTE tariffs for $35 per month, which is $15 lower than MetroPCS's comparable LTE offering."

Kaufman added that the move is also a defensive one.

While Sprint has a stable of prepaid brands, and Boost Mobile recently ranked at the top of a list of noncontract wireless providers in a recent J.D. Power and Associates study, during the third quarter of 2012, Sprint's prepaid growth was 8 percent. This compares with the 22 percent, 18 percent and 29 percent prepaid growth rates of Verizon Wireless, T-Mobile and US Cellular, respectively.

The prepaid market also seems to have a new entrant or a new model every quarter.

Solavei, which runs on T-Mobile's 4G network, uses its marketing budget to instead pay subscribers who get friends to join up, and pays them still more when those friends get their friends to come aboard. GoSmart offers rates that start as low as $30 a month, though for 2G service, or $45 for unlimited "high-speed" service, by which it means T-Mobile's 3G network.

T-Mobile itself, which late last year began the process of acquiring prepaid brand MetroPCS, now also offers not a prepaid but a contract-free model.

"Sprint's new LTE offering creates a new differentiator that will complement its unlimited data offering," said Kaufman. "It will also provide customers with more prepaid services and device choices in a market where tier-1 carriers still tend to save the best devices and services for their postpaid customers [and] preempts any attempt from T-Mobile to corner the 'best value LTE' message when it launches its LTE network in 2014."

The HTC One SV runs Android 4.0 and HTC's Sense 4 user interface, features a 4.3-inch display, a 1.2GHz Qualcomm Snapdragon S4 dual-core processor, a rear 5-megapixel camera with 1080p video and VideoPic—a feature that lets users snap a photo while recording video—as well as a 1.6-megapixel front camera and WiFi, GPS and near-field communication (NFC) technologies.

It will retail for $299.99.

The Boost Force, with its lower price of $199.99, will run Android 4.0 and feature a rear-facing 5-megapixel camera, a 1-megapixel camera up front, and WiFi and GPS.

"At Boost, we know our customers need a comprehensive wireless solution without breaking the bank," Boost Mobile Vice President Andre Smith said in a Feb. 25 statement. "We bring value and speed together like no other carrier."