Irvine’s Boost Mobile LLC, which markets prepaid cell phones made by parent Sprint Nextel Corp., is looking to grab market share as pay-as-you-go wireless service goes mainstream.
“The stigma of prepaid is eroding,” said Matt Carter, Boost’s new president and general manager. “It used to be known as kind of the poor man’s choice. But it’s now become more mainstream.”
Some 20% of U.S. cell phone users, or about 61 million people, are expected to use prepaid services by the end of the year, said Carter.
With prepaid service, users pay for a set amount of calling time in advanced. When the minutes are up, they buy more time. The plans usually include low-end phones.
Some who are feeling squeezed in the current economy may shy away from traditional monthly contracts in favor of Boost’s by-the-minute or by-the-day offerings, Carter said.
“Certainly the state of the economy has made some folks think through how they are going to budget for their wireless services,” Carter said. “We do know that people view wireless services as a necessity and that it would be the last thing to go if they only had a dollar in their wallets.”
Boost targets the under-35 crowd.
‘Sprint Guy’
The unit nabbed Carter earlier this year from its parent company where he was Sprint’s senior vice president of base management.
At Sprint, he was charged with reducing Sprint’s “churn” rate,industry speak for the number of subscribers who defect to other wireless service providers each month.
He’s tasked with taking Boost from startup mode to operating as a mature, polished company under Sprint’s umbrella.
The brand has its roots in Australia and New Zealand, where it launched in 2000.
The company started in California and Nevada in 2002 and was bought by Nextel Communications Corp. in 2003. Sprint bought Nextel the following year.
Under Carter’s direction, Boost is set to shake up its marketing in order to match the changing dynamic of its potential customers.
“Our core audience is young adults ages 18 to 34, be we are finding that we are getting people who are older and younger,” Carter said.
It’s seeing new customers in parents who want to manage their kids’ cell phone minutes and elderly people who are budget-conscious, he said.
Boost’s customers also are getting more diverse.
“Historically, prepaid has attracted ethnic minorities and recently arrived immigrants,” Carter said. “But the biggest segment in the prepaid space is now white consumers, a group that continues to grow significantly.”
The company is working with a new ad agency, Omnicom Group Inc.’s 180 L.A., to launch a TV and print campaign next month.
In the past, Boost has associated itself with hip-hop culture and edgy musicians, artists and comedians.
It’s known for sponsoring a slew of events and activities, including a car show, a high school basketball tournament, surf and skate contests and even an Indie rock label.
Carter wants to widen its scope within the “edgy, irreverent and humorous” image Boost projects.
“Perhaps in the past we focused too exclusively on hip-hop and that appealed only to a certain segment of the population and didn’t really resonate with these other growth segments that we’ve seen,” he said. “Going forward it’s a multicultural view.”
Since Carter’s been on board, he’s been filling out Boost’s executive ranks.
The company needed to “make sure we are having the right people within the right structure to hold people accountable,” he said.
Boost, which has about 245 workers here, doesn’t disclose sales.
Carter, 47, had to prove he wasn’t going to change Boost’s youthful style.
“When I first came here I was ‘the Sprint guy,'” he said. “But I didn’t want Boost to feel like Sprint.”
Workers at Boost wear jeans and flip-flops, or Carter’s choice of black high-top Chuck Taylors.
“I want to maintain the energy and creativity for the company and not make it feel like it’s a big, established, corporate sort of entity,” he said.
