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RadioShack to offer no-contract wireless service

Tue, 09/04/2012 - 11:25am
The Associated Press

Electronics retailer RadioShack Corp. said Tuesday that it will launch a no-contract, RadioShack-branded, wireless service powered by mobile phone company Cricket Communications Inc.

The line of no-contract phones will be available to mobile customers at RadioShack stores across the U.S. starting Wednesday.

The move is an attempt by RadioShack to stop shopper defections and turn around its results as electronics buyers increasingly shop online instead of at brick-and-mortar retailers. In July, RadioShack reported a net loss for the second quarter and suspended its dividend.

The no-contract cellphone market is growing, while contract-based plans have plateaued, experts say. No contract plans, as opposed to plans that lock users in to a 1- or 2-year contract, are aimed at people with low incomes and poor credit, or who don't want to be tied down with contracts or can't meet credit qualifications.

Fort Worth, Texas-based RadioShack said the wireless service phone line up will include smartphones and feature phones. The service will first offer the Huawei Mercury Ice, an Android phone, for $149.99 and the Huawei Pillar, a phone with a full keyboard, for $39.99. More phones will be available by the end of September.

Radio Shack's service will offer a $25 plan with 300 voice minutes and unlimited text, as well as a $35 plan with 1,000 voice minutes and unlimited texting for feature phones.

For smartphones, plans include a $50 per month unlimited voice and data plan with 1GB full speed 3G data and a $60 a month unlimited voice and data plan with 2.5GB full speed 3G data. Both include unlimited data usage. The more expensive plan includes more data usage before downloads begin slowing down.

San Diego-based Cricket Communications is owned by Leap Wireless International Inc.

RadioShack shares rose 9 cents, or 3.5 percent, to $2.52 in afternoon trading. Leap shares rose 1 cent to $5.48.

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