It would appear that Americans are becoming commitment-phobic, as a recent study reveals people are shying away from long contract mobile plans in favor of shorter month-to-month prepaid deals, with an estimated one in five US subscribers choosing the latter.
One would think that in the age where iPhone and Android offerings are king, most young-uns would be queuing up to sign their lives away to their nearest network provider, but New Millennium Research Council (NMRC), a Washington, D.C. based think tank says new prepaid wireless customers are outflanking new contract subscribers in terms of sheer numbers for the fourth quarter of 2009.
If the data is accurate, it would represent the first time in modern history that US prepaid services are winning over more users than contract services.
So, just how many people are we talking here? NMRC says the prepaid market skyrocketed some 17 percent in Q4 to 54.4 million subscribers, up from 46.3 million during Q4 a year ago. In addition, new prepaid subscribers made up around 65 percent of the 4.2 million new subscribers that all U.S. carriers added in Q4 of 2009.
By contrast, contract-based subscriptions grew only by a measly three percent in the same quarter.
Firms like Leap Wireless and MetroPCS are certainly keeping giants like AT&T and Verizon on their toes, as the behemoths try to mount a credible defense against the onslaught of $40 unlimited prepaid deals becoming so prevalent.
Even the temptation of shiny new smartphones doesn’t seem to be enough to tempt customers, especially as the prepaid firms have started bringing in smartphone offerings of their own, including sleek touchscreen, Android offerings.
Ahh, but what about the data plans? Because after all, text and talk is all fine and dandy, but people nowadays want internet connectivity. Well, no surprises that prepaid is going after data plan pricing with a vengeance too, which will likely result in some rather desperate and speedy price slashing over at the big telcos.
Already, AT&T and Verizon have responded with pay-per-day or per-week 3G services for laptops, and that’s just the beginning.
Subsidizing devices, it seems, just isn’t enough to cut it these days with price conscious consumers wanting to slash their monthly payments in half. They can do the math, and know when they are overpaying.
Slashing prices and offering prepaid models, however, is something of a double edged sword to the wireless giants, as they would stand to lose rather a lot of revenue from the lucrative contract deals, as well as making it easier for customers to flit between providers to cash in on better offers.
Meanwhile, for those who choose to go prepaid, talk is cheap, and getting cheaper.
