Prepaid becoming all the rage with souring economy

by Darren Murph posted Dec 12th 2008 at 2:10PM

Trust us, we're as sick (if not more so) of hearing about this so-called soft economy as you are, but the statistics here just don't lie. It seems that in times of cautious spending, exuberant cellphones and their respective plans are one of the first things to go, with a number of prepaid-focused carriers reporting significant growth in Q3 2008. MetroPCS picked up nearly a quarter-million net new subscribers in the quarter (double its prior year increase), while Leap Wireless snapped up 156,000 net customers (tripling its year-earlier growth). Furthermore, T-Mobile has reported a gain of 670,000 subscribers in the same window, and over half of those were of the prepaid variety. On the real, we've nothing against prepaid in and of itself, but are you telling us you'd rather chow on fast food (over, say, Top Ramen) and live without unlimited monthly data? Don't kid yourself.

[Via textually]

Filed under: Culture, Others, T-Mobile, Studies

Tags: economy, prepaid

Reader Comments (Page 1 of 1)

Neutral

Alzn @ Dec 12th 2008 2:30PM

In the Philippines its almost 100% prepaid there.

Neutral

Michael @ Dec 12th 2008 2:48PM

I think part of MetroPCS' growth can be contributed to their expansion into new markets. For instance, here in Michigan, they've expanded past their old Metro Detroit market and moved up into Lansing, Flint, Saginaw, Bay City, Midland, and some other smaller communities. These are some economically depressed areas with large African-American populations that might normally use companies like Nextel or BoostMobile. It's a perfect opportunity to move up here to reach these neighborhoods and gain some more subscribers. Especially because MetroPCS offers unlimited everything for only $50 a month.

Neutral

Teh Lup @ Dec 12th 2008 3:01PM

Virgin Mobile, $80 a month for Unlimited Txt and Minutes.

Only advantage contracted providers have is their wireless content/coverage (especially coverage over non-contract providers like Metro.)

Neutral

Nerd Ferguson @ Dec 12th 2008 3:09PM

Prepaid is an awesome alternative for those who don't necessarily talk/text a million minutes/texts a month. Me personally, i hate counting how many min I have left and virgin mobiles phones are way too ugly to to entice me.

Neutral

RCC2k8 @ Dec 17th 2008 10:08AM

The slow economy has more people worried about loosing their jobs anyday. For these people, no-contract plans are a really attractive alternative. They get more value than traditional pay-as-you-go prepaid, and they don't have to worry about paying ETF's if they loose the job and have to cancel the cell phone service.

The only thing I don't like is that MetroPCS and Cricket are both CDMA, so you are stuck with their crappy phone selection, or in the best case scenario, flashing a Sprint, Alltel or Verizon handset to convert it into a Cricket-branded handset for example. Now, if only a GSM carrier (a real GSM carrier, not TracFone), would jump into the no-contract unlimited plans wagon, that'd be awesome. Being able to use a decent unbranded phone without being tied to a contract with a carrier nickeling and diming you all the time would be awesome.

Neutral

Eric @ Dec 12th 2008 3:19PM

Darren: Most of the world is prepaid. It's here in the US that we've been conditioned to think prepaid is for a lower life form not worthy of anything special.

It's the carriers who collectively push this idea on us by offering deep subsidies only to those who sign 2 years of their life away. Rate plans generally offered by the big 4 domestic carriers are more attractive on the postpaid side.

If prepaid offerings were richer and less restrictive, we could see a huge emergence or boom of sorts domestically. Until then, we'll be subject to less incentives for prepaid patrons.

Neutral

ReVeLaTeD @ Dec 12th 2008 4:24PM

During the glory days of what used to be called "AT&T Wireless", I was perfectly content on their GoPhone service. Now I can't stand AT&T as far as I can throw them.

I'm on contracted service now - changed because of service. The service area is pathetic on prepaid compared to postpaid. Additionally, the prepaid providers aren't really true prepaid: forcing you to still pay a certain amount each month to keep the service on. Tracfone is still around (somehow) but you know what I mean.

Also, email and web on the go is critical, as I travel frequently on business. Prepaid's offerings in this area aren't great.

Neutral

Derek @ Dec 12th 2008 4:39PM

I never saw what the big deal was with cell phone contracts and phones that do a little bit of everything, but don't do any of those things really well. Perhaps in the last year they've improved, but still. I have a much better digital camera than 98 percent of the digital phones out there. I have a laptop if I want to be mobile, and a desktop at home for more computing muscle. I prefer NOT to have to type with my thumbs or look at a 2-3 inch screen. I have a game system at home. All those extra things drain battery time for what a phone is really for ... to CALL PEOPLE. I think the only great thing they've integrated into a cell phone that I might think about using is the GPS function. I don't even need the "free" long distance or anything like that because I have Vonage at home.

I've used Boast Mobile for over 3 years now, and haven't had an issue. 10 cents a minute, and half price if the person you are talking to is on the Sprint Network. I put a 20 dollar card on it every 3 months, which makes the extra minutes rollover. 80 dollars a year, people with plans can pay that for ONE MONTH! I don't have to worry about beingt locked into a company. I get bad service ... throw out the phone, buy a competing company's phone for 50 bucks and WHAM-O! I'm back in business.

When I've been accosted in the mall with the "looking for a new plan, switch to ..." they never seem to have a nice cheap plan available. I wonder why that is? If they offered a plan that included a phone, 200 anytime minutes, and the ability to leave the contract after 1 year ... all for 20 bucks a month I would probably be on board. They don't MAKE any money that way though, it's through all those extras you don't really need that they make their money.

Neutral

Mark @ Dec 12th 2008 6:15PM

Unless you're completely skint or are bent on buying $1000 phones, having a nice phone doesn't mean you can't have other stuff. I have a camera, GPS and mp3 player too - both in my phone and as separate gadgets. I also have a small netbook, but the phone can't be beat for unobtrusive browsing.

Neutral

aoi tsuki @ Dec 13th 2008 1:42AM

"Boast" Mobile indeed. Your prepaid plan works for you. Good for you. i'll continue paying my contract plan with voice and data on my Fuze. Having the functionality of multiple devices in one greatly trumps the fact that i'd get a better experience if i were to carry separate devices, and it's pretty much essential for business. Not having to run to the laptop to send or receive emails is so much more convenient, and better on my back.

Neutral

David S @ Dec 13th 2008 12:41PM

I have a camera, gps, mp3 player, PDA, a Peek, Kindle, and cell phone as separate devices too. I also have a Batterang.

-Batman

Neutral

ace587 @ Dec 12th 2008 4:36PM

its good while you keep ur lifestyle, but if u use email and data a lot, then thats why Sprint created SERO :D

Neutral

Fernando @ Dec 12th 2008 5:45PM

Good, I hope I'll be alive the day that prepaid takes over contracts in the USA

Neutral

Eric @ Dec 13th 2008 4:49PM

I dont get what the original post is talking about no unlimited data plan. I am on Cricket and I have unlimited everything except roaming, and I pay 53 bucks a month after Tax. Sprint, Tmobile, Verizon, and AT&T can not compete with that. I also can get top of the line competitor phones for cheap on ebay. I bought an HTC Touch Pro for 300 bucks on ebay, was a bad esn on sprint. Ill even be getting 91 bucks back due to MSofts live search program. So I get an HTC Touch Pro, new in box, for 210 shipped. Thats cheaper then most carriers carrying it sell it with a new 2 year activation. On top of that I get unlimited data, unlimited txt, unlimited mms for half the price of competitors. I don't think I will ever go back to the none prepaid carriers.

Neutral

Gary @ Dec 16th 2008 3:31AM

I've never fully understood why pre-paid customers are treated like 2nd class citizens. I prefer the cost control you have with pre-paid. I've tried both and find that I'm often paying for things I don't use or need with my bill plan.

Neutral

Dylan @ Dec 16th 2008 10:35AM

Before switching to prepaid phones, one thing to consider is finding out exactly how much money you can trim off your current cell plan. I personally use a Verizon Wireless cell without a land line as I've found several ways to tease out improved cell rates. Probably the most effective strategy I've found is saving me around $230 per year off my original cell bill which equates to roughly a free month of cell service for me. To do this, I used the website www.fixmycellbill.com (by a company called Validas) where you upload your online bill which is analyzed to determine how much money you could be saving on your plan. Up to this point everything is free. If you choose, Validas provides a highly detailed and personalized cell bill adjustment report that is emailed, for five bucks, to your wireless provider in industry specific format so you can actually implement Validas's cash saving changes to your plan. If Validas can save you more than $5 on your bill (the average customer currently saves $484 annually through Validas), this obviously provides a cost effective remedy for reducing cellular expenses.

I was actually so impressed by Validas that I got a job there when the opportunity arose. It's a great company that is rapidly becoming considered the top advocate for the wireless customer. Check out a feature about Validas on The Big Idea with CNBC's Donny Deutsch at http://www.cnbc.com/id/22782456/. Any cell subscriber who wants to cut costs should consider this service.

Good luck to everyone on getting the best rate you can.

Dylan