On the corner of 20th and Mission streets estamos juntos, or we’re together. A block down, we’re sin límite, or without limits.
It could be advertisements for personal development, but no, it’s cell phones, and the eight-block stretch of Mission Street from 16th to 24th has become a microcosm of what is happening in the wireless market across the country: a rush of customers looking for prepaid calling options. The demand is one that is happening at the briskest pace in the Latino community.
“There’s a recent boom,” said José Cruz in Spanish, an employee of seven years at the MetroPCS location on Mission, near 25th Street, “because they’re realizing the financial power of [Latinos].”
While the cell phone industry has watched growth slow in the more lucrative mobile phone set market, prepaid cell phone plans have become increasingly popular as customers look for more flexibility. And even in a recession – or because of it – prepaid is one of the few sectors in the industry that’s growing.
“People are cornered. They’re looking for the cheapest options,” said Cruz.
Nowhere is the rush to prepaid more visibly changing the landscape than on Mission Street, where nowadays prepaid service providers are as ubiquitous as taquerías. Of some 10 providers in an eight-block stretch, three have opened in the last six months.
It wasn’t always so. From 2002 to 2005 – when it signed its 1.5 millionth customer – Metro was Mission Street’s lone prepaid cell phone provider. The big money – and where the leaders Verizon and AT&T focused their efforts – was in selling handsets and signing customers to contracts.
They succeeded. In June of 2005, only 66 percent of the U.S. population had wireless, but by this summer the number jumped to 89 percent.
Up and down Mission Street and across the country, others have caught on to the market for prepaid cell phones.
Verizon moved to the Mission in 2005 and offered one prepaid plan at one rate. That’s history as they now offer four plans. Twenty percent of sales at the Mission Street location are in prepaid, said Chris Solano, the Verizon manager.
AT&T has also gone flexible and introduced two new prepaid plans since it moved to Mission Street in 2008. Three out of 10 of their customers inquire about prepaid plans on a daily basis, said Maria Pineda, the AT&T store manager.
The smaller wireless companies such as Sprint – who with T-Mobile represents 30 percent of the wireless market – had already discovered the prepaid demand, bought up smaller prepaid companies and have since moved into the Mission.
Sprint acquired Boost Mobile in 2005, which had always focused on selling to the teen market, and in July it announced its plans to acquire Virgin Mobile to again increase its share of the prepaid market.
Earlier this year Boost expanded its reach from teens to anyone looking for inexpensive service. Heather Tien, the public relations officer for Boost described the new customer as, “a value-seeking audience.” With this in mind, Boost opened an exclusive store in September on Mission Street, near 24th.
“A big reason why we moved to the Mission District,” said Tien, “is because of the way [it’s] set up, the great foot traffic and the Hispanic demographic is one of our new target markets.”
Even Sprint boasts two locations – one near 17th Street and the other near 22nd Street.
The wireless market has become so focused on Latino customers that the CD retailer Ritmo Latino has made a deal with T-Mobile. Business owner David Massry decided it was more lucrative to clear out the CDs at his store on 20th and Mission streets in October, declaring to the tune of salsa music “estamos juntos,” or we’re together, and “PagoFlex,” or FlexPay, is the way to go.
Who is winning in the Mission?
Metro, with three locations on Mission Street, is the leading provider of unlimited no-contract phone service and is the fifth largest wireless carrier in the U.S. Compared to 2008, it increased its revenue in the second quarter by 27 percent to approximately $860 million. It also added 206,000 new subscribers, according to Metro’s second quarter press release.
Boost is not far behind Metro. Since the company introduced its unlimited everything plan in January – unlimited nationwide talk, text and web for a flat $50 a month – it has experienced the highest increase in new subscribers in the prepaid industry since 2005, according to Tien.
In San Francisco it increased its subscribers by 50 percent and sells 50 phones per week at the Mission District store.
Few on Mission Street are surprised.
“The whole world wants to talk,” said Cruz, the manager of Boost’s competitor, Metro.