Boost Mobile, the Irvine mobile phone company that popularized pre-paid plans for teens, is dropping the youth angle and opting for something more universal: Value.
“Boost is refocusing our strategic direction to offer value and simplicity in products and services geared to that segment of population that is motivated by cost,” Andy Colley, Boost’s director of corporate communications, told me this morning in a phone interview. ”We have no interest in competing with the iPhone.”
Specific details will be announced after in the first quarter of 2009, he said. The company already offers a variety of “value” plans, including an unlimited text-messaging plan that averages $1/day. The highest-priced unlimited talk and text plan is $70/month.
From its “Where you at?” TV commercials featuring Blink 182′s Travis Barker to extreme sports events and rock concerts for young volunteers, Boost’s existence has always been tied to youth culture. On one Register visit to its office, the company turned its street into a totally killer motorcycle ramp (see video on right) — one of the most extremely un-Irvine sightings I’ve ever seen.
But beyond its fun cultural leanings, Boost offered users an alternative to the two-year contracts and initiation fees of traditional mobile companies. The pay-as-you-go service helped kids get a phone without having the credit you would need for a post-paid service. Text messaging, walkie talkie chatting (to avoid using minutes), a friendly GPS service and call tones were just a few features that its target users gobbled up.
I guess Boost is growing up.
According to market researcher Yankee Group Research, the growth of pre-paid users has outpaced the traditional mobile phone industry for the past five years. Last year, the pre-paid niche in the U.S. grew 18.3 percent, while post-paid group grew 4.4 percent.
Pre-paid is still a much smaller segment of overall users — approximately 18 percent of all users. But both growth rates are declining. By 2010, pre-paid users are expected to grow 7.2 versus 1.4 for post-paid users, according to the Yankee Group.
Part of this transformation is to ensure Boost remains competitive with other pre-paid rivals, such as MetroPCS and Cricket Communications, which offer unlimited plans without a long-term commitment. Although by losing the youth flavor, I wonder if Boost will lose its identity.
Boost is still important to Sprint, which hinted at Boost’s transformation last week by recommitting itself to the Nextel brand, which Sprint acquired in 2005. Sprint plans to make the Boost Unlimited model into a nationwide service.
“Our old strategy was focused on youth, 14 to 24, and a cool brand — not that we’re going to abandon the cool brand. But think of us as Value Plus. It’s like Kia vs. Scion. They are similar products but people default to Kia. People proactively seek Scion because it’s the ‘plus’ of the brand,” Colley said.
Colley said that Boost will still be somewhat irreverent. Its latest TV commercials feature a frumpy George Washington who drives a beat-up Monte Carlo. He’s experiencing a revival thanks to Boost’s new unlimited texting plan, which comes out to $1 a day.
“We just launched an advertising campaign, the George’s, which maintains the irreverence but is significantly different from just trying to be cool,” Colley said.
No decision has been made on whether Boost will continue sponsoring the professional skating and motorcycle competitions, and other youth-oriented events.
“We’re just not diving so deep into that exclusive youth set,” he said.
More mobile-phone news you may be interested in: