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Wireless carriers are getting more creative when it comes to making happy, loyal customers. Today, Sprint's prepaid brand Boost Mobile unveiled a new scheme that lowers customer's bill when they pay on time. The already generous unlimited plans start at $ 50, but could drop to as low as $ 35 a month over 18 months Tonya Carter used to buy cell-phon ringtones from her mobile service provider, Verizon Wireless. But lately she's found a way to bypass her carrier and download them straight from the Web. Carter, a 33-year-old Houston resident, pays about $ 10 a month for a service called Thumbplay which gives her access not only to ringtones but to a gamut of games and graphics.

 

A growing number of content-hungry consumers are circumventing carriers, depriving the likes of Verizon Wireless, AT & T (T),and Sprint Nextel (S) of a key source of revenue. Currently about 80% of content for mobile phones is purchased from carrier Web portals; in five years carrier portals will account for only 25% of all content purchases, estimates David Kerr, an analyst at Strategy Analytics. U.S. carriers are already feeling the pinch. Growth in revenue from so-called mobile content-ringtones, mobile games, wallpaper, music, and video downloads-slowed to 15% in 2007, according to CTIA-The Wireless Assn., An industry trade group. In 2006 content sales surged 90%, to $ 1.9 billion, consistent with the pace of earlier years.

 

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Carriers say they'll make up for the lost revenue through fees for the Web access that makes content downloads possible. "The content piece is not as meaningful for service providers as access," says Kevin Packingham, vice-president for product development at Sprint Nextel. "That's what's really going to move the needle." Adds AT & T's chief marketing officer for wireless, David Christopher: "We never said these content areas would take over the world." Indeed, revenue from the larger category of wireless data, which includes mobile content and Web access, rose 53%, to $ 23 billion, in 2007, according to CTIA. No wonder wireless carriers want users to sign up for data plans. On Apr. 14, Verizon Wireless announced a new $ 30-a-month data plan for smartphones that offers unlimited e-mail and Web browsing.
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