Boost, $50 prepaid cellphone service, may start price war

— -- The new offering on Sprint's older, slower phone network is 50% less than national carriers charge, prompting some analysts to wonder if a price war might be brewing. In a research note sent to investors, Bernstein Research analyst Craig Moffett pointed out that $50 marks "a new low in the wireless market."

Boost's aggressive pricing could prove challenging for big carriers, including parent Sprint, already being pinched by the U.S. economy. For consumers, Boost's $50 plan could come as welcome relief, says Walter Piecyk, a telecom analyst with Pali Research. "The pricing could not come at a better time, given the economic weakness that is driving increased interest in cheaper unlimited-rate plans," he says in a research note.

Prepaid, or "pay as you go" plans, don't bind customers to a contract.

Matt Carter, Boost's president, downplayed the notion that the $50 plan could hurt Sprint.

Boost doesn't offer as many advanced services as Sprint, including GPS navigation. Carter says mobile Web browsing is also "a lot slower" than it is with Sprint, which has a new 3G network.

Boost uses the old Nextel network called "IDEN," famous for its "push-to-talk" service.

Even with those limitations, Carter predicts the $50 plan will be a big hit, especially among those who might not normally consider prepaid as an option.

Unlike most prepaid plans, the $50 plan doesn't have regional restrictions.

And Boost's plan includes all taxes except state sales taxes. Big carriers typically charge separately for taxes, which can add 20% or more to monthly bills.