Target (NYSE:TGT) announced that it will discontinue its pre-paid wireless phone service just two years after the service's launch. Customers of Target's Brightspot are being contacted and notified that service will be terminated by the beginning of 2016, and no new consumers can activate the service after June 24.
The retail chain entered into the wireless market in a partnership with T-Mobile in late 2013, with hopes of getting a piece of the growing industry, USA Today reported. The move was also in reaction to competitor Walmart's (NYSE:WMT) successful Straight Talk wireless service. Both services are examples of mobile virtual network operators in which third party sellers offer wireless access to networks such as T-Mobile or AT&T. They are an alternative to often expensive, long-term contracts.
The closure of Target's pre-paid wireless business comes not long after the retailer announced the shuttering of another business: its Canadian stores. Instead, the company is looking to focus on core areas of growth and reported a 52 percent jump in profits last quarter.
Customers of Brightspot are being encouraged to switch to T-Mobile's pre-paid service, which will cost users about the same or a bit more than their current access.
"The vast majority (nearly 70%) of Brightspot customers will save $5 a month, and absolutely no one will see their cost go up when they switch to T-Mobile Simply Prepaid," Gavin Dillon, VP at T-Mobile told USA Today. "And, they'll get a lot more without paying more—like the ability to turn their phone into a Wi-Fi hotspot, Wi-Fi calling, visual voicemail and in-flight texting on Gogo-equipped flights. We think people are going to be really happy if they choose to switch."
-See this USA Today article
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