AT&T launches new prepaid plan at Walmart, Target

AT&T launched a new prepaid plan that is only being offered through national retail outlets, including Walmart, Target and Dollar General.

The new AT&T Unlimited Max Plus plan is $65/month with autopay ($75 without autopay) and offers high-speed data with 5G access, unlimited talk and text, 35 GB of mobile hotspot usage and 500 minutes of long distance calling from the U.S. to more than 30 countries, among other things.

Unlike the advertised $55 Unlimited Max plan, the carrier promises “data can’t slow down based on how much you use.” Both new and existing customers can sign up for it, an AT&T spokesperson said.

It’s the latest prepaid offer from AT&T, whose Cricket Wireless brand a week ago launched multi-month rate plans for new customers who sign up online. Those new Cricket plans are for customers who sign up for a single line only as opposed to family plans. The idea is the more time they buy, the more they save – and for AT&T, the more time they buy, the lower the churn.

John Dwyer, president of AT&T Prepaid and Cricket Wireless, was featured this week on the The Week with Roger podcast with Recon Analytics’ analysts Roger Entner and Don Kellogg. Dwyer said one of the reasons AT&T prepaid has such low churn is because it serves a lot of multi-line accounts. By targeting single line accounts, this latest offer from Cricket opens up a new segment for the carrier.

AT&T reported prepaid Q2 2023 churn of 2.5% and said churn at Cricket was lower than all of AT&T prepaid combined but didn’t publish that percentage. That compares to T-Mobile Q2 prepaid churn of 2.62%. Verizon has been losing prepaid customers since it acquired TracFone and its prepaid churn was 4.24% at the end of June.

Prepaid (slowly) going digital

For a long time, the belief has been that the entire prepaid category will go digital, and Dwyer said he still believes that will happen, but it’s taking longer than initially thought.

“I think the reason that people continue to want to go into retail stores is because the decision about their wireless service and their wireless device frankly is one of the most important ones that they make,” he said. “The amount of time that we spend with these devices is pretty significant."

AT&T has about 4,500 Cricket Wireless-branded retail stores today to serve this segment but it’s also been investing significantly into the move to digital. For example, TryCricket is an application targeting the digital segment where iPhone or Android customers can get a 14-day free trial of the service.

Low churn advantage

According to Dwyer, the thing people most underestimate about Cricket is stated right there in its tagline: People who come to Cricket stay with Cricket. AT&T bought the Cricket business from Leap Wireless in 2014, but the Cricket brand has been in the market for 24 years with a mission of serving customers where they live. The low churn allows it to continue to invest in the business, said Dwyer, who has been at Cricket for about eight years.

Overall, there are about 74 million customers in the U.S. prepaid category and AT&T serves about 17.6 million of those. Over the last four years, AT&T has been the fastest growing prepaid carrier in the nation pretty consistently, he said.