It looks like Boost Mobile's new $50 unlimited calling plan has become a victim of its own success.
Customers using the prepaid wireless service, which is owned by Sprint Nextel, say that they've experienced delays in receiving text messages. The problem was first reported by the Associated Press. A Boost representative acknowledged that since March, some customers have experienced text delays that have lasted anywhere from a few minutes to a few hours.
"We've already diagnosed and isolated the problem," said John Votava, Boost's spokesman. "And we've been working day and night since late March to fix the problem. Our technical team has been upgrading the network, and they've told us that the work will be completed by May 7."
Boost began offering its. The $50 service, which doesn't require a contract, and costs only $50 for unlimited voice, SMS, and MMS messaging, and Web browsing, has proven to be very successful, the company has said. Exactly how successful, won't be known until Monday when Boost's parent company Sprint Nextel reports first quarter 2009 results. But analysts are expecting the subsidiary to report that it's gained about 500,000 new subscribers in the first quarter. As of the end of the fourth quarter of 2008, Boost had 3.6 million subscribers.
"To be honest, we were overwhelmed by the number of people signing up for the unlimited service," Votava said. "People have really been taking advantage of the unlimited texting, as they should, and it has caused us some growing pains."
Votava said delays have occurred most often during peak hours, which are from 2 p.m. EDT to about 10 p.m. EDT.
Boost uses the Nextel portion of Sprint's network for its service. Nextel uses a technology called iDEN, which differs from Sprint's PCS network, which uses CDMA. Over the years, Nextel users have complained occasionally of delayed text messages, the AP reported. But Votava said that Boost, which has used the Nextel network for its service since it launched in 2002, has not had any problems over the past seven years with delayed text messages. He said the problems only started occurring after the $50 offer went nationwide.
The AP reported that several customers are upset and frustrated with the service, but many say they won't drop the service because it's so affordable.
At $50 a month, the service is indeed a bargain. But Boost will need to fix this problem if it expects to compete with other low-cost providers, such as MetroPCS Communications and Leap Wireless International. These regional operators have long offered unlimited calling for roughly $50 per month in some areas. And now they are expanding their services into bigger cities in the Northeast. Boost also faces competition from Virgin Mobile, which followed Boost with its own $50 all-you-can-eat prepaid plan. T-Mobile USA is also offering a similar service to its existing customers in an effort to keep those customers.