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Flat Wireless Shutting Down Due to Tough Competition

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Flat Wireless, a regional mobile operator, has some bad news.

Earlier today, the company announced that it will be shutting down its commercial wireless network and will be turning into a Boost Mobile dealer. Flat Wireless sell its services under the brand, ClearTalk.

Kevin Beierschmitt, the CEO of Flat Wireless, explained that this decision comes from his lack of funds to continue operating the business. In order to keep the business afloat, the CEO intends to switch things around in the business. At the same time, the CEO hopes he could retain a number of employees.

There's no secret about the tough competition among players in the prepaid wireless sector. Ever since AT&T acquired Leap Wireless (from Cricket) and T-Mobile acquired MetroPCS, things have been extremely hard for the smaller brands.

The competitiveness in the prepaid wireless space has led Flat Wireless to sell off its spectrum holdings and turn its retail operations into retail stores where customers can purchase Sprint's Boost Mobile prepaid service. In the long run, Beierschmitt plans to redeploy some of its network assets and spectrum so it can obtain revenues from roaming services.

With this announcement, the areas that will be affected include Texas, Arizona, and California. An earlier report by Wave7 Research noted that ClearTalk has since discontinued its services last March 16. As for its customers, the company has started to transition them to Boost by offering a $49.99 iPhone 6 or free Android phones.


Flat Wireless follows the footsteps of other small wireless network operators Revol Wireless and Cincinnati Bell in exiting this highly competitive industry.



Source: Fierce Wireless

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20 comments:

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  1. Is it even possible to legitimately profit as a reseller when you're competing with the service provider itself?

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    1. Flat Wireless wasn't a reseller. They were a regional mobile operator with their own network and towers. But it's true that both MVNOs (resellers) and regional operators are getting squeezed by the four national operators.

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    2. Eventually the 4 cell providers will drive most/all of the MVNO's out by pricing their plans the same, and keep the margins for themselves. As a business model there is no real justifications for an MVNO.

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    3. They're becoming a Boost (Sprint) dealer/reseller, and my point was that it still seemed like a questionable move.

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    4. If they sold their spectrum and towers to Sprint, Boost would provide the same coverage to Flat's customers. Sprint may also have offered Flat exclusive Boost territory and other incentives to close the spectrum deal

      Wirefly published a post that goes into a more detail about why Flat shut down: Flat Wireless to shut down its operations | Wirefly. According to that story the primary reasons were the difficulty and cost of obtaining compatible CDMA handsets and the high prices the national operators charge for roaming.

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    5. "Eventually the 4 cell providers will drive most/all of the MVNO's out by pricing their plans the same, and keep the margins for themselves."

      But then when they've eliminated all MVNOs, their prices will go up...which will spawn new MVNOs.

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  2. Who did they sell spectrum to? Sprint?

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    Replies
    1. Probably, although a quick web search doesn't find anything documenting the sale.

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  3. Were they CDMA or GSM ?

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  4. They were a regional provider. Their own network. It stretched into Mexico thats why it was popular. Not an MVNO. They were popular because you could flash a stolen cdma device

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    1. I guess even the cartels expect better service and coverage.

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    2. I guess everyone who travels to or in Mexico must be in a cartel, right?

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  5. cleartalk had unlimited hotspot. sad

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    1. Only sad for the 5% of the US population that had their VERY spotty WiMax coverage.

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    2. ClearWIRE was a WiMax operator. AFAIK, Flat Wireless' ClearTALK never offered WiMax.

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    3. ClearTALK never offered unlimited hotspot.
      1. Their hotspot plans were limited to 40GB/mo.
      2. Their 'MiFi on Android' option cost $20 extra. They said they would suspend or disconnect you if you used too much.

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  6. eventually all CDMA sprint and Verizon MVNOs will go Down! limited handsets and high price of CDMA phones makes it very hard to attract new customers, GSM MVNOs have a larger selection of low cost phones that make BYOD easy.

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    1. I don't see that happening for two reasons:
      1 In the sort run, increasing availability of affordable CDMA compatible unlocked phones like the Moto E4.
      2 In the long run, CDMA itself is going away. Verizon is going all-LTE at the end of next year and Sprint will too eventually.

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