Assurance Wireless – Case Study

assurance wireless case study

Overview of Assurance Wireless

Assurance Wireless is brought to you by Virgin Mobile USA and one of Sprint’s no-contract brands. Often referred to as a Lifeline Assistance program supported by the low-income program of the federal Universal Service Fund, Assurance Wireless was designed to ensure that quality telecommunications services are available to low-income consumers at affordable rates.

The typical customer eligible for Assurance Wireless include those who participate in Medicaid, Food Stamps/SNAP, General Assistance, Temporary Assistance to Needy Families, The National School Lunch Program’s Free Lunch Program (NSL). Customers may also qualify based on low household income.

In addition to a voice mail account and call waiting, Assurance Wireless provides caller ID and access to 911 in case of emergency. Beyond the 250 free voice minutes each month, customers are able to add on services and choose from additional minutes, texting, international calling and more at competitive rates. 1

The Telecommunications Industry

The telecommunications industry consists of six sectors: local, long distance, Internet, wireless, data, and private line. The two largest sectors combined, Internet and wireless, have grown by more than $7.3 billion or 25.9% since 2012, and accounted for more than 63.8% of total telecommunications revenues in 2012 and 72.3% in 2016. 2

The industry lacks competition with AT&T making up almost 40% of wireless subscriptions in the third quarter of 2019 3. Verizon, T-Mobile, and Sprint are the other major wireless operators in the United States that make up other significant portions of the market. With prominent players taking up the bulk of the industry it is important for Assurance Wireless to carve out a portion of loyal users in order to maintain a profitable business.

Customer Responsiveness

As opposed to many of the larger carriers, as mentioned Assurance Wireless does not require its users to buy a contract and provides a free cell phone and service to eligible low-income customers. Continuing to create a strong customer presence the company even increased its core voice offer from 200 to 250 free voice minutes per month in 2010.

The core offer remains the same: users have 250 minutes of free talk time and the option to buy additional minutes or texts at 10 cents each. The $5 Talk offer increases the number of minutes available each month to 500; the $20 Talk & Text offer increases the minutes to 1,000 and adds 1,000 text messages. 4 Assurance Wireless also offer a Service Protector feature which ensures that the basic 250 free minutes are guaranteed even if a customer cannot pay the additional dollars during a particular month.

Grace Boehm, Director for Assurance Wireless, was quoted during an economic downturn saying “during these tough economic times customers have to make difficult decisions on how to spend their money but wireless communications has become a necessity for people for a variety of reasons. Assurance Wireless wants to help our subscribers by providing a variety of options beyond our basic offer.” 4

A telecommunications survey revealed that adults, regardless of household incomes are equally as likely to use their mobile phones for employment searches. Eight of 10 Americans reported feeling dependent on their cell phones and using their mobile phones to stay in contact with family and seek help in case of emergencies. In response to this survey, the company added safety features including caller ID and access to 911 to their mobile offerings in case of an emergency. 4

Benefits to Strategic Partnership

Assurance Wireless Strategic Partnerships

Going after a different type of customer than most of their competition, Assurance Wireless has to rethink their marketing strategy from their parent company Sprint and Virgin Mobile USA. One of the ways that Assurance Wireless has been able to expand their market reach and increase their brand awareness is through partnering with OmniCare Health Plan Inc.

OmniCare Health Plan is committed to providing quality health care coverage and promote the wireless service as a way for its customers to manage their health by being in direct contact with health care providers 5. Beverly Allen, CEO for OmniCare Health Plan spoke about the importance of this partnership, citing that the company’s “members need to have access to their healthcare providers at all times. With this partnership, we can provide unlimited “free” calls to their primary care provider’s office and to our plan. This will eliminate one of the barriers our members experience in obtaining quality health care services.”  5.

This is only one of many strategic partnerships that Assurance Wireless has pursued. Gold Mobile (GoMo Health) have also teamed up with the wireless company to jointly deliver mobile patient and communications solutions for health care insurers, and HMOs 6.

The partnership between Assurance Wireless and Gold Mobile allows health care organizations to strengthen channels of communication with their patients by being able to place calls or send text messages with information to promote preventive health care and remind patients of regular check-ups with their doctors. The two organizations complement each other, providing a way to improve communications with health care providers for their shared demographic. Dave Avila, Business Development Manager for Assurance Wireless, commented “Through our combined programs, we will provide affordable, socially conscious health & wellness communications for low income member patients, to improve their health and ultimately, their quality of life.” 6.

Strategic relationships allow businesses to cross-promote, build on each other’s strengths, fill in gaps in areas of growth, share intelligence, attract new customers and expand business offerings to existing customers. By partnering with health care organizations to connect customers with doctors, Assurance is able to get a section of the market that is underserved and expand its business offerings to new customers that may not have heard of them in other capacities.

Looking Ahead: The Future for Assurance Wireless

With the adaption of 5G it will be interesting to see how Assurance Wireless fares. With shifts in technology, regulatory, and customer behavior, the industry is hard to forecast. But, with long-term, sustainable growth, telecommunication will require new network platforms, business models, and capabilities that harness the Internet of Things to meet changing customer needs. As long as the company continues to focus on catering to an underserved sector of the population with a large need for telecommunications, the future looks pretty positive.

Sources:

  1. https://www.businesswire.com/news/home/20120224005147/en/Assurance-Wireless-Marks-One-Year-Anniversary-Providing-Cell
  2. https://crtc.gc.ca/eng/publications/reports/policymonitoring/2017/cmr5.htm
  3. https://www-statista-com.proxy.lib.sfu.ca/statistics/199359/market-share-of-wireless-carriers-in-the-us-by-subscriptions/
  4. https://newsroom.sprint.com/assurance-wireless-introduces-two-new-low-cost-offers.htm
  5. https://www.healthcarefinancenews.com/press-release/assurance-wireless-and-omnicare-health-plan-partner-michigan-improve-communications
  6. https://www.businesswire.com/news/home/20120910005342/en/Assurance-Wireless-Gold-Mobile-Partnership-Delivers-Affordable

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