Tuesday, April 6, 2010

Wireless Contract Services Losing to Prepaid Offers?

It appears that services requiring a wireless contract are becoming unpopular due to cheaper options such as prepaid plans and devices.

The New Millennium Research Council, a Washington, D.C.-based think tank, conducted a study revealing that new prepaid wireless customers exceeded the number of new wireless contract subscribers that signed up for service in the fourth quarter of 2009.

Apparently, this is the first time that prepaid services have outsold post-paid or contract services.

This trend may be due to the crippling recession as more people are seeking more affordable wireless services.

Jose Guzman, the NMRC project's coordinator stated,

"Thanks to the recession, the U.S. cell phone marketplace continues to undergo fundamental changes that will just get bigger as the economic downturn deepens. What is different from a year ago is the explosion in new 'all-you-can-eat' and unlimited prepaid deals as low as $30 and $45 that will remain attractive to consumers long after the current recession is over."

The prepaid wireless customers have grown steadily in recent years. Estimates indicate that one out of every five of the 285 million cell phone subscribers in the U.S. now use prepaid phone service. On the other hand, wireless contract-based cell phone subscribership grew only 3 percent over the last year.

Is this trend a lasting one or simply an abnormality brought by the poor economic conditions? Well, more study is needed to draw a conclusion. However, this trend may benefit consumers. The rising popularity of prepaid phone services may force big cell phone providers to slash prices on wireless contract service plans to keep consumers from defecting.

That's it for this wireless contract news. Stay tuned for the latest updates and developments from the wireless industry.

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