Prepaid Growth Expected to Continue after Recession

The weak economy and a recent surge in prepaid wireless plans indicate that the trend toward them will continue throughout the year, said speakers on a New Millennium Research Council teleconference Wednesday.

The economy is putting the U.S. wireless market through “fundamental changes” that will only increase, said Jose Guzman, a project coordinator at the council. The difference from a year ago is an explosion in unlimited prepaid offerings for as little as $30 and $45 a month that will remain attractive to consumers long after the recession ends, he said. There has been a proliferation of affordable prepaid plans, with services including unlimited voice, text and web access for as little as $45 per month, said John Breyault, a vice president of the National Consumers League.

Increased prepaid price competition, additional offerings from the biggest national carriers, better devices and greater flexibility of prepaid plans are expected, said analyst Mark Lowenstein of Mobile Ecosystem. Prepaid services have become more mainstream -- available at attractive prices, on the national carriers’ networks and with a competitive array of devices and features, he said. “We are also seeing the growth of various flexible pricing options regarding data services,” Lowenstein said. For the first time in Q4, the number of new prepaid wireless customers in the U.S. outnumbered new contract-based cellphone customers, the council has found. New prepaid cellphone subscribers accounted for nearly two-thirds of the 4.2 million mobile subscribers, net, added by U.S. phone carriers, it said. Prepaid grew 17 percent to 54.4 million subscribers. The council found that contract-based service grew only 3 percent, NMRC said.