Tech Rumor of the Day: MetroPCS - TheStreet

Wall Street saw a crushing threat looming for

MetroPCS

(PCS)

as low-end rival TracFone -- a big player in

Wal-Mart

(WMT) - Get Report

and

7-Eleven

stores -- rolled out an unlimited calling plan.

The rumor had it that MetroPCS and prepaid peer

Leap Wireless

(LEAP)

customers, unencumbered by contracts, would flee to TracFone's unlimited $45 Straight Talk offer.

But some now say the Tracfone stuff may be a lot weaker than anticipated.

For those unfamiliar with the full landscape of our nation's great mobile phone addiction, you should know that we are a two-class wireless society.

One class is the conventional contract customer who buys fancy telco-subsidized phones like

Research In Motion

(RIMM)

BlackBerries and

Apple

(RIMM)

iPhones, and makes regular monthly payments north of $50 a month.

The other group, known as prepaid, consists of customers who pay full price for cheap phones and refill their minutes allotments as needed.

MetroPCS and Leap have become the low-cost cell phone alternatives serving small cities and towns outside the prime big-city focus of giants like

Verizon

(VZ) - Get Report

and

AT&T

(T) - Get Report

. The prepaid offer has a strong appeal for people lacking strong credit histories. It also is a cheap wireless alternative to those looking to cut the home landline.

Prepaid's appeal has cranked up in the past year as unlimited calling and messaging offers have gained popularity.

For a $45 unlimited prepaid calling purchase, users get an all-you-can-eat supply for 30 days. And not only is it an easy fix for heavy callers, it's also a big stimulant for growth among the prepaid companies.

Some investors consider the prepaid segment of the telecom services sector one of the few cheap values with strong growth potential. And the new unlimited trend could easily sweep through the market.

UBS analyst John Hodulik issued a note Tuesday saying basically that it is early enough in the unlimited prepaid growth trend that Tracfone's entry will have a minor impact. As

Sprint's

(S) - Get Report

Boost unlimited offer

shows

, the rise of the prepaid class has largely benefited from the decline in the conventional contract market.

With only a quarter of the total 50 million prepaid market switched to unlimited, there's plenty of upside, says Hodulik.

"We expect unlimited to eat away at the traditional prepaid market while taking a slice of the postpaid market as well," Hodulik writes, "suggesting room to run for a segment growing at 2 million net" new customers a quarter.