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Cricket Wireless Increases Customer Upgrade Interval To One Year

It’s a new year and saving money is among the more popular new years’ resolutions. For Cricket Wireless customers, this may mean holding on to their phones a little longer. As detailed in a newly issued prepaid report by Wave7 Research and uncovered by Mil Hustles, starting today, January 6, 2023, Cricket Wireless customers will have to wait 12 months to receive the discounted upgrade price when buying new phones. A review of the post-pandemic market may point to Cricket playing a long game in terms of reducing demand, to meet supply.

What Does This Mean, Exactly?

When a customer purchases a phone at Cricket, either online or in a retail store, there is a waiting period before they are eligible for a discounted price. Should a customer need to purchase a new device before that time is up, it means paying the full retail price for the phone. For most consumers, it is worth the wait. But for others, a broken phone must be replaced quickly even if it means paying a substantially higher price.

Until 2021, the waiting period for a new device discount was 90 days from the last device purchase. In 2022 the waiting period doubled to 180 days. It is believed that this was Cricket's effort to improve profitability and curtail demand for more devices.

And Then, In 2022…

For most of 2022, the discount for existing customers was notably lower than in previous years, with some phones like the Moto G Stylus 5g remaining at full retail price for several months. During this time, supply was low and a nationwide shortage for one of the most popular phones in the lineup was a reality. Customers reacted to the shortage by switching to Metro by T-Mobile and getting the same phone for free. Once again, hitting Cricket where it counts, in the profit column.

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“Cricket Wireless pushing the upgrade interval back from 6 months to 12 months is a rational move that will improve profitability for Cricket/AT&T. It is hard to imagine that many customers will be unhappy about this. The interesting questions for 2023 are whether other carriers like Boost Mobile and Metro by T-Mobile will do something similar and whether port-in intervals will also be pushed back.” - Jeff Moore, Principal of Wave7 Research

According to one retail store manager, many customers were upgrading at the first available opportunity. A polling of one mid-South dealer with 50+ locations reported almost 70k device sales, with 45% of those being upgrades. Consumer demand for more phones was not dramatically affected by the 180-day waiting period in 2022. But, there was a nationwide shortage of the most popular devices in the prepaid market segment including the Moto G Pure and the Samsung A53.

That Was Then, This Is Now

Looking forward into 2023 and a 12-month wait for new devices, the forecast for subsequent device purchases looks grim. By enforcing a full year before existing customers are eligible for discounts, this could mean a higher churn rate for Cricket retailers, but for those who do not mind paying the higher price, it is more money back to the dealer.

“(I) expect many to switch away. They’ll leave, and there’s a 50/50 chance they’ll return.” - Mil Hustles

Should the trend set in 2021 repeat in 2023, many customers needing new phones within 1 year of purchase will likely look for deals offered by competitors like Metro and Boost. Some may ultimately switch back to Cricket for lower-priced group save plans. Others may be gone for good. In the effort to slow demand for devices, and raise profit margins, 2023 will indeed be an interesting year for dealers.

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