Chains dial into cell phone biz

Drug Store News, Dec 15, 2003

Last year, AT&T Wireless turned away 4 million customers looking for cellular service who did not meet the company's credit threshold. To day, winning those customers back means offering services like pre-paid mobile phones. Prepaid phone cards, which users buy to add minutes to pay-as-you-go plans, are appearing on end-of-aisle displays at a growing number of drug stores.

Consumers with a patchy credit history, no credit or those who simply do not want to commit to a long-term annual contract, are buying. Enter prepaid mobile phones like AT&T's Free-2-Go, Cingular's Keep in Contact and T-Mobile's EasySpeak. Virgin Mobile is targeting its pay-as-you-go service to "hipsters, slackers and many people in between" by selling the perfect cellular relationship: no contracts, no monthly bills and no hidden fees. The company also has tie-ins with VH1 and MTV.

To gain a foothold in the growing pre-paid turf war, some providers are offering rebates on pre-paid phones as an extra incentive. Carrying the pre-paid mobile phones is a logical next step for drug stores. Some chains, including CVS and Rite Aid, have already begun offering prepaid phones in select stores. Rite Aid's circular for the week of Nov. 30 to Dec. 6 featured the Virgin Mobile K-7 pre-paid cell phone for $59.99.