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Tuesday, August 21, 2012

Prepaid wireless market growing, with reason

U.S. prepaid wireless subscribers topped 100 million for the first time, according to a report from analyst Chetan Sharma, with use growing by 12 percent compared with a year ago. With prepaid wireless plans, customers do not have to lock themselves into lengthy contracts subject to early termination fees, undergo a credit check to open an account or pay a deposit. Prepaid plans may cost more upfront, because with most plans, subscribers pay for their phone upfront. Under standard wireless arrangements subject to contracts and credit checks ("postpaid"), customers often receive heavily discounted or even free phones. The rate for voice and data may be somewhat higher than for postpaid plans, and some prepaid plans require customers to buy additional phone time at regular intervals whether or not they need it. However, as more and more customers migrate to smartphone data plans as a way to access the Internet, the price of prepaid data has fallen dramatically. This is in stark contrast to the postpaid industry, which has all but eliminated unlimited data plans in favor of measured data. Bottom line: Check out prepaid wireless plans. There's a lot to like.