When will the big players get the pre-paid service model right? Verizon for one has made the use of their pre-paid service for ONLY "dumb" simple feature phones and have not included 3G Multi-media devices or smartphones. They also have it priced to almost be a penalty (IE. aim it at "bad/low/no credit" customers). The extra premium on the monthly service is very high - and you are already buying the phone at full retail (which is to be expected).
All the big boys need to stop marketing pre-paid at less-creditworthy customers and embrace it for what it really is. The dynamics of the consumer is changing. Besides this also encourages competition because its not the contract holding you - its the customer service, price of equipment, and/or quality of the network.
Prepaid wireless outpaces contract services
Summary
Cash-conscious consumers are flocking to prepaid month-to-month wireless phone service in lieu of contract-based plans.
Topics
Cash-conscious consumers are flocking to prepaid month-to-month wireless phone service in lieu of contract-based plans.
A study released by the New Millennium Research Council, a Washington, D.C.-based think tank, last week said new prepaid wireless customers exceeded the number of new contract subscribers that signed up for service in the fourth quarter of 2009. This is the first time that prepaid services have outsold post-paid or contract services, the group said.
New prepaid cell phone subscribers accounted for almost two-thirds of all 4.2 million cell phone subscribers that U.S. carriers added in the fourth quarter of 2009. The prepaid market grew 17 percent during the quarter to 54.4 million subscribers, up from 46.3 million during the same time a year ago. Meanwhile, contract-based cell phone subscribership grew only 3 percent over the same period.
According to the report, one out of every five of the 285 million cell phone subscribers in the U.S. now use prepaid phone service.
For more on this story, read Prepaid wireless outpaces contract services on CNET News.
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JT82- I agree with you for the most part. I don't believe the "big boys" really care about providing customer service. I, for one, am sick and tired of dealing with Hadji in New Delhi every time I have a problem. For the money the big boys charge for their services they can easily afford to hire folks in this country to service accounts generated in it. My biggest complaint against T-Mobile is the way they nickel and dime me. I am a "dinosaur" when it comes to cell phone service. I do not NEED, nor WANT, text, 3G, or any other techno BS.
You are spot on regarding the consumer dynamics. People without jobs need to have better control (and utilize it when they have it) over their wireless costs. Prepaid makes too much sense for the big companies as there are precious few ways to shaft the customer for a few more $$.
Thanks for your smart post.
You are spot on regarding the consumer dynamics. People without jobs need to have better control (and utilize it when they have it) over their wireless costs. Prepaid makes too much sense for the big companies as there are precious few ways to shaft the customer for a few more $$.
Thanks for your smart post.
when will the consumers stop falling for the so called subsidized phone with a contract? When the contract costs you 2-3 grand, the upfront cost of the phone is almost immaterial.
People get excited if the upfront cost of the phone drops say from $299 to $199. That is well under 5% of the total cost. I say "big deal".
Until the US market becomes more like the European one, we will continue to get shafted.
People get excited if the upfront cost of the phone drops say from $299 to $199. That is well under 5% of the total cost. I say "big deal".
Until the US market becomes more like the European one, we will continue to get shafted.
Is the American consumer so stubborn about capitalism that they keep paying for high prices ? As shown in Europe and elsewhere, cell phone service can be a lot cheaper. Why not in America ? Is it socialist, is it spreading the wealth ? What's wrong with the American consumer ? Do they like to get shafted/fleeced ?
I have no problem putting $600 for a device (aka Moto Droid, my current phone) however I want to see that device be able to transition carriers with similiar technology (aka VZW to Sprint), which will never happen - at least not yet. Now I bought Moto Droid for $299 vs $559, thats quite a subsidy and the total cost of the contract is just under $2300.
Though I will caution you, its disingenous to compare the total cost of contract because the price of service generally is the same (T-mo being the exception). So as it stands now, if I want a smartphone (My Droid) I must be a post-paid customer. I cannot be a pre-paid customer and pay full retail for the device.
What needs to happen is when you are under contract (or accept a subsidy) the price of your service is more expensive than someone who is paying for JUST service, there is less to lose and is nothing but total profit. Again I admit people need to get off the subsidy train because there is no free lunch (and quite honestly people dont even understand cell phone contracts, which is another matter altogether) but captialisim says if the market will bear...
Pre-paid is still a "joke" to most big carriers and will only care once their post-paid starts sinking which is sad because pre-paid offers the carrier the satisfaction of knowing that they will never have a delinquent customer (so no need for collections) and the consumer gets to control their usage (a win for the cell phone company too).
Though I will caution you, its disingenous to compare the total cost of contract because the price of service generally is the same (T-mo being the exception). So as it stands now, if I want a smartphone (My Droid) I must be a post-paid customer. I cannot be a pre-paid customer and pay full retail for the device.
What needs to happen is when you are under contract (or accept a subsidy) the price of your service is more expensive than someone who is paying for JUST service, there is less to lose and is nothing but total profit. Again I admit people need to get off the subsidy train because there is no free lunch (and quite honestly people dont even understand cell phone contracts, which is another matter altogether) but captialisim says if the market will bear...
Pre-paid is still a "joke" to most big carriers and will only care once their post-paid starts sinking which is sad because pre-paid offers the carrier the satisfaction of knowing that they will never have a delinquent customer (so no need for collections) and the consumer gets to control their usage (a win for the cell phone company too).
It seems the recession was the much needed catalyst that caused a lot of Americans to look more carefully at their spending. This article is hopefully an indication that the 'contract-is-best' attitude is finally being questioned.
I switched to prepaid 4 or five years ago (currently using NET10) before prepaid became popular and even though I check for new deals every three months or so, I never see cell contracts that I think would be worth the hassle of being tied in for a two-year period.
It just doesn't make sense to sign contracts like that. They are restrictive, expensive and prone to abuse (service levels drop if they know customers can't switch without being penalized).
I switched to prepaid 4 or five years ago (currently using NET10) before prepaid became popular and even though I check for new deals every three months or so, I never see cell contracts that I think would be worth the hassle of being tied in for a two-year period.
It just doesn't make sense to sign contracts like that. They are restrictive, expensive and prone to abuse (service levels drop if they know customers can't switch without being penalized).
I have used a pre-paid for 6 years. My wife's phone for three years. Simply put, we don't use the phone much. My credit is perfect. I would like a better phone and would be willing to pay more for a fully featured phone. But Virgin doesn't offer one. The phone companies make a lot of money on those long term contracts. They are unwilling to give up their cash cow.
http://www.virginmobileusa.com/cell-phones
They just come out with new broadband USB modem for $99 and you put time on it when you need it. Cheers!
They just come out with new broadband USB modem for $99 and you put time on it when you need it. Cheers!
Getting laid off from your job suddenly can certainly make the benefits of a prepaid mobile phone over a locked in multi year contract obvious. I've had a variety of prepaid phones through the major carriers here in Canada over the last 8 years. Everyone I know who has an expensive contract lives to regret it in times of economic downturns in their lives.
Part of the problem that I have observed with family, friends, and others as it relates to wireless service is the notion of "must have" the latest, greatest, and fastest. Of the large number of people who have 3G technology who really needs it? I have a cousin who used to practice law, lost his job, then moved back in with Mom and Dad though he is almost 50. Though he had just gotten a job in the medical lab field (his gig prior to law)he immediately upgraded phone and service. This despite the fact that he was on probation at his new job. Of course he did not get hired permanently. Maybe because when things got slow at the hospital he worked at I KNOW he was surfing the net in his phone. Problem? He doesn't have the sense to regret his long term contract renewal!
HOW ABOUT FREE CELL PHONE SERVICE http://www.mywownetwork.com/free
whats this a freekin joke? The nets sponsored links replying to blogs to drum up business? Low of the Low if you ask me!!!!! Go get a life!!!
..what posters are doing here in this blog. Giving folk practical info, hopefully solutions to real, rubber meets the road issues.
Rather than blathering on about Wind, the new kid on the block that is helping to break the Big 3's stranglehold on our wallets in Canada, I saved words. I let folk look at the facts for themselves. Voila!.
Just the facts! That way nobody has to take my word for it.
So, maybe rather than freekin' out, you should get a life, and lower your cell phone bill in the process! And nobody asked you.
Take care!
Rather than blathering on about Wind, the new kid on the block that is helping to break the Big 3's stranglehold on our wallets in Canada, I saved words. I let folk look at the facts for themselves. Voila!.
Just the facts! That way nobody has to take my word for it.
So, maybe rather than freekin' out, you should get a life, and lower your cell phone bill in the process! And nobody asked you.
Take care!
I'm switching my AT&T land line and my Verizon m to m plan to Tracfone soon. Total outlay now: $80. With Tracfone: $20
After many years of dealing with cell phone company contracts I decided to go with a prepaid because it is a lot cheaper and a lot less hassle.
I am a technogeek when it comes to phones but I can get a good phone on Ebay or CraigsList without having to be locked into a contract for 2 years.
I am using Virgin Mobile now and it seems that they ahve the best pricing. Customer service is really good and I have no complaints.
I am a technogeek when it comes to phones but I can get a good phone on Ebay or CraigsList without having to be locked into a contract for 2 years.
I am using Virgin Mobile now and it seems that they ahve the best pricing. Customer service is really good and I have no complaints.
I have both contract (T Mobile)and prepaid wireless (Net10) because I still have a valid contract. Once it expires I am pretty sure I will give all my business to Net10. The savings are substantial $40/month which equates to almost $500 year. There are absolutely no hassles with Net10 which is far from the case with T-Mobile.
They actually run a pretty good pre-paid system and attractive offers. If you dont use the phone everyday, I think its like $1 per day (on days you use it) you get unlimited mobile to mobile, nights/weekends starting at 7pm, and 10cents per minute during the day. Seems very fair to me, plus its just a SIM change, no need to change your current phone.
The phone I bought from tracfone qualified me for double phone credits for life. I buy 60 mins for $20 and they automatically add another 60 mins. Now, that's a steal.
I have been using Tracfone for over a year, and Skype as well.
I wouldn't go back to a long-term contract.
I wouldn't go back to a long-term contract.
We've been using Tracfone for so long they gave us new phones and bonus minutes for free so they could turn off their analog subsystem. Too bad the old analog phone actually worked better 
$100 a year for more talking than I'll ever do is pretty hard to beat.
$100 a year for more talking than I'll ever do is pretty hard to beat.
The fools I work with can't understand why I don't want to pay $80 to $100, or more, per month for a "smart phone".
My prepaid costs me around $12 a month.
I've got notebooks and desktops if I need to do something other than making a call.
My prepaid costs me around $12 a month.
I've got notebooks and desktops if I need to do something other than making a call.
>>> My prepaid costs me around $12 a month.
Here in Canada, I have pre-paid service with Speakout Wireless, which is sold through 7-11 stores. They have $25 vouchers with a 365-day expiry. That's possibly a whole year of service for 25 bucks, and my usage is so low that I never use up my time. Personally, I would like to see vouchers with NO expiry date, although not sure how that would fit into any company's business model.
I find it absolutely staggering to see how mobile phones have become such a central feature in people's lives. The idea of being able to get in touch with anyone, anywhere, when you NEED to, is a pretty impressive technical achievement. However, the "dark side" of this includes: excessive spending on cell contracts, ring tones, shiny new phone-of-the-month, cases, etc; excessive TIME wasted on pointless chatter and texting, when people could really be doing something more useful with their lives; car accidents caused by driver attention on texting or yakking. I'm almost embarrassed to be part of the engineering and technical community that helped create the cell phone business, to see how it has become a time and money-wasting toy. So sad...
Here in Canada, I have pre-paid service with Speakout Wireless, which is sold through 7-11 stores. They have $25 vouchers with a 365-day expiry. That's possibly a whole year of service for 25 bucks, and my usage is so low that I never use up my time. Personally, I would like to see vouchers with NO expiry date, although not sure how that would fit into any company's business model.
I find it absolutely staggering to see how mobile phones have become such a central feature in people's lives. The idea of being able to get in touch with anyone, anywhere, when you NEED to, is a pretty impressive technical achievement. However, the "dark side" of this includes: excessive spending on cell contracts, ring tones, shiny new phone-of-the-month, cases, etc; excessive TIME wasted on pointless chatter and texting, when people could really be doing something more useful with their lives; car accidents caused by driver attention on texting or yakking. I'm almost embarrassed to be part of the engineering and technical community that helped create the cell phone business, to see how it has become a time and money-wasting toy. So sad...
Depends on what you consider "waste". I have easy access to my email from anywhere (NOT while driving!), vs. paying for a phone and also for internet access at home. Why should I pay $30/month for home internet, when most of the time I am either not there or am sleeping?
your emails and your text messages on your pepaids too!
I have only been a pre-paid phone customer and I have had a cell phone for more than 10 years, the same phone for more than 8 years. I just bought a new phone and I stayed with Net10 because they offer everything I want and none of the economic slavery that comes with a contract. Many of the pre-paid companies are moving toward 3-4 G and maybe then I'll jump on that bandwagon. I like being free!
I have started using Straighttalk. I pay 30.00 dollars a month for 1000 anytime minutes. I still had 2 hours of talk time left over at the end of 30 days. No drooped calls. No contract. Total start up cost with the hundred dollar phone was 135.00. If I want unlimited talk time, it is 45.00 a month. I also have unlimited text and web surfing. Straighttalk.com, check it out.
Friends of mine are using Metro PCS and they only pay $40 per month for unlimited calls, including long distance and roaming, unlimited text, and unlimited web. Not only can you use the phones they sell but you can usually have other phones flashed to work on their network so you can pick up a pretty decent phone on Ebay for a nice price.
I have used Tracfone as my cell phone provider for about seven years. The service has been better than the "contract" providers I had previously. Customer service at Tracfone has been very good overall, and by far better than I received from Sprint or AT&T. My only complaint is the limited models, I would like to upgrade to a slightly better phone, but not at the extreme. (Meaning I am not interested in the "touch" screen cell phones.) I should note that Net10 and Straightalk are also owned by Tracfone. I am a very happy long term Tracfone customer.
I use two prepaid services, Virgin Mobile and T-Mobile. I use T-Mobile because I like a higher grade pohone for internet and things like that and the pay as you go plan is reasonable. I use Virgin Mobile on a monthly plan because it is easier and even with this and their simple phones you can access the internet for $5 a month and it is more than enough at 20MB of service for the monbth. Text is only $5 per month for 1000 texts.
I would rather shell out the 125$ monthly premium I pay form my BB Storm on the Nation's Best network, the big V than use that ****** service offered by Metro Pcs.. I tried it out for a month once as a side phone and it really sucks. Their service is lousy, and you'd get better reception if you just rigged two soup cans with a wire. Honestly, you get what you pay for.
Been using prepaid since 2005, best move I ever made. Changed carriers a couple of times, but recently signed on to Tracfone, excellent service and coverage. Had to lend my pnone to my iphone toting brother, because ATT did not reach the Arkansas backwoods where we were. However, Tracfone saved the day. The best thing, I just pay for services, not taxes, fees, and a fee to use my device. Smart move I'd say!
Credit scores took a huge hit in 2008 and 2009. I wonder
if that is partially responsible for the increase in use
of prepaid phones. Anecdotally, most of the people I
know with prepaid wireless have bad credit and either
can't get a contract plan at all, or can't afford the
deposit.
if that is partially responsible for the increase in use
of prepaid phones. Anecdotally, most of the people I
know with prepaid wireless have bad credit and either
can't get a contract plan at all, or can't afford the
deposit.
Go Tracfone. Use not because of credit but for simplicity of cost.
something to think about prepaid should be cheaper than a contract service, why? because if you think about it the company is getting cash in advance for the service and doesn't have to worry about someone running up their bill and then not being able to pay up on time which cost the company $$$$. if they can't pay and end u getting disconnected the company will suffer the setback but with prepaid only the company will always be on top and have no expenses as legal fees, eliminate some cost such as the printed bill, the billing dept and many more. So i thing the first company that does this change will be the company of the future, sure they see it as a secure customer and a monthly bill every month but if the price is cheaper on the prepaid customers will talk more and buy more cards and there will less hassles for the company and the consumer
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