Why Walmart's New Branded Wireless Plan Could Kick Up Static
Walmart (WMT) is adding to its cell-phone plans, slapping its own name on its new Walmart Family Mobile plan with T-Mobile. The retail behemoth is already selling two mobile calling plans with Verizon Wireless (VZ) and Sprint Nextel (S)...but now it's got essentially the generic house-brand version as well.
Here's why offering a company-branded wireless plan is a bad idea:
- Competing against your vendors. The news that Walmart is pairing up with a competitor and offering customers a cheaper plan than yours that bears their own name can't be endearing Walmart to Sprint and Verizon. The price on Walmart's plan is being lauded as quite low in the world of monthly-bill plans at $45 a month to start. It's also offering steep price discounts on the five phone models it's offering with the plan. Can't be sitting well with the other vendors.
- Getting blamed for problems. The main thing about wireless phone service is -- well, sometimes it just plain sucks. Can you hear me now? Well, not always. With a Walmart plan, when the service is out, customers will have one more reason to feel like Walmart sells them cheap junk. Wireless service isn't like slapping the company brand on private-label toilet paper. Wireless involves billions in technology, support is ongoing, the service can be a critical lifeline for the increasing throngs who don't own a landline and only use their cel. Now, it can be all Walmart's fault when it malfunctions.
- Feeding conspiracy theories. There's a distinct proportion of the population that fears Walmart is trying to take over every business sector. They've caught heat for their forays into banking, for instance. This move is not quelling those fears. Gizmodo snarked in its story on Walmart Family Mobile, "Looks like Walmart's wrapping its tentacles around cellphones."
- Seeming dorky. While the wireless industry is moving fast in the direction of prepaid calling plans, Walmart's branded plan is an old-fashioned post-paid plan, where you get a bill at the end of the month. Bloggers are already commenting that they wouldn't be caught dead with a Walmart phone on their hip, just on principle. Besides their obvious lack of teen street-cred, Walmart has made it even dorkier to use their service by using a billing format that's on its way out. You also have to pay separately in "buckets" for data storage, so the phone is basically for families who want to use it like a phone -- if you want to pick up email or surf the 'Net, forget it. Since that's increasingly what people want to do on their phones, that's a problem. Wireless is a sophisticated industry, and it's not clear Walmart has the expertise it needs to stay on top of the trends here.
Photo via Flickr user Monochrome
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