If it is you, you wouldn't be alone.
During the fourth quarter of 2009, new prepaid wireless customers exceeded new contract customers for the first time ever, said the Washington, D.C., think tank New Millenium Research Council.
In that quarter, prepaid cell phone users accounted for 65 percent of 4.2 million net new wireless subscribers. That's two out of three new customers who chose prepaid over postpaid.
Postpaid is what we are use to. Obtaining credit and paying a bill later. With that said, the wireless carrier also wants a 2 year commitment. With the economy down, and many people having credit issues, obtaining a mobile wireless phone is almost impossible. The real problem here is two fold. Carriers are always coming out with new plans, and sometimes better rates. You as a customer from another wireless company can not switch and take advantage of those rates, since you are locked into a contract.
Prepaid wireless now is showing through these studies as an emerging champion. As with Web 2.0, the consumer wins with Prepaid wireless. It is the same service, but you are on a month to month and pay up front, with NO CREDIT CHECKS.
Wireless experts and consumer advocates say the popularity shows no signs of letting up.
As Americans look for ways to cut corners and save, even wireless customers used to cell phone contracts are deciding to go commitment-free.
"I think it shows consumers are beginning to vote with their wallets when it comes to wireless service," said John Breyault, vice president of public policy, telecommunications and fraud for the Washington, D.C.-based National Consumers League.
The ideal candidates for prepaid plans used to be those who were credit-challenged or who didn't make many calls in a given month, he said. But as the prepaid marketplace has grown, Breyault continued, more "all-you-can-eat" prepaid plans have emerged that are increasingly appealing to all kinds of customers.
"I think you will see more people who have had cell service, they will look more at prepaid options," he said. "In a recession, that's one place where most customers can look and save money."
And, while prepaid customers used to have to forego the latest and greatest handsets (that are often subsidized by multiyear cell phone plans from bigger carriers such as AT&T and Verizon), he said that cell phone options are increasing.
The biggest company that uses the Sprint and Verizon network is LightYear Wireless. They provide Prepaid service using Sprint's 4G network, and they sell Postpaid service using the Verizon network.
"I don't think that a prepaid plan and the latest handset are mutually exclusive," Breyault said, predicting that customers will increasingly see more prepaid handsets that more closely resemble postpaid handsets.
Even as the economy starts to improve, Breyault said he doubted he'd see the trend reverse.
Analyst: Wireless Market Is Segmenting
Sam Simon, a fellow for the New Millenium Research Council, said that while the recession is certainly a factor, the wireless market itself is also changing.
"The market that is voice only -- voice and text -- is developing as almost a separate marketplace," he said.
Services such as Cricket and Tracfone resell minutes from the major carriers, but they tend to stick to the basic cell phones that are good for talking, texting and minimal Web browsing.
While the bigger carriers, like AT&T and Verizon are also offering prepaid plans, he said they're really pushing the smart phones, such as BlackBerries, iPhones and Android smart phones, that come with more costly monthly data plans.
"You're seeing a segmentation in the marketplace," he said.
iPhones, BlackBerrys, Android Phones Use to be tied only to Contract Plans. Not any more. For instance, LightYear Wireless, we found, has some of the newest models available for Prepaid plans. Not all the options available at AT&T, Verizon, or Sprint, but a well rounded and representative number of new models.
For heavy multimedia consumers or those who need more features for professional purposes, smart phones could be the way to go.
But a growing number of people are realizing that they don't actually need all those features and could save dearly over time.
"Prepaid was painted in the past as the low-rent option, the budget option," said Scott Steinberg, head of technology for technology consulting and analysis firm TechSavvy.
"Now it's quickly becoming recast as the practical option for everyday cell phone users who don't want to be tethered to or shackled to a wireless plan. There's been a major shift."
It used to be that you might sacrifice coverage or customer service, but increasingly that's changing, he said.
Know Your Plan, Check for Savings
Savings is just like earning money. It is as old a truth that there is. You put more earnings in your pocket with every penney or dollar saved.
For example, people could only use about 100 minutes a month could save about $20 to $360 a year with Boost Mobile's Pay as You Go service plan.
Consumer Reports' Blyskal said Tracfone was another top-rated carrier in terms of customer service, Web service, connectivity and more. He said it resells minutes from Verizon's network, which has consistently come out on top.
"The more bells and whistles you want, the more likely you'll be with contract, but that's changing. Keep your eyes on prepaid," Blyskal said. "You have to do the math and check it out, but it seems like it's pretty good."
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