Regional cellular carriers MetroPCS Communications Inc. and Leap Wireless International Inc. have made a business out of offering cheap talk plans, but their limited service areas have kept them tiny compared to the major national carriers.
Now those service areas are about to balloon. The two are set to announce that starting next week, they will allow free roaming on each other's networks for users on their more expensive monthly plans. For other subscribers, roaming will cost $5 per month.
With the move, the two are laying claim to having a "nationwide" network, though it doesn't yet cover some large cities, like New York, Boston, Chicago and Washington, D.C.
Richardson, Texas-based MetroPCS will start offering roaming on Leap's network Monday for subscribers with $45 and $50 monthly plans. This will let it access major markets like San Diego, Portland, Ore., Nashville, St. Louis and Houston. Outside the combined networks, roaming still costs 49 to 79 cents per minute for MetroPCS customers.
San Diego-based Leap, which does business under the Cricket brand, will start offering MetroPCS roaming Wednesday for subscribers on $50 and $60 plans. Major markets it is gaining include Los Angeles, San Francisco, Atlanta, Dallas and Miami.
MetroPCS had 4.8 million subscribers at the end of September. Leap had 3.5 million.
The roaming agreement will be particularly useful to subscribers because unlike other regional carriers like Alltel, MetroPCS and Leap's coverage areas mostly are not contiguous, with long distances between covered cities.
For instance, MetroPCS customers in Dallas will now be able to roam for free in Austin, Houston and San Antonio, said MetroPCS's chief operating officer, Thomas Keys.
The expansion of the service areas "really cuts into the lead that bigger carriers have," wrote Macquarie Research analyst Philip Cusik.
The two carriers have had a contentious relationship. In 2006, Leap sued MetroPCS, saying it had stolen the idea for flat-rate mobile service. Last year, MetroPCS offered to buy Leap Wireless, but was rejected.
On Sept. 29 this year, the carriers announced that they had buried the hatchet, settled litigation and would offer mutual roaming.