The Prepaid Cell Phone Boom
The mobile cellular phone marketplace has changed in recent years. While the cell phone companies continue to add new subscribers, the market share for standard post paid programs is getting smaller. Post paid plans are quickly being replaced by more cost effective pre paid cell phones.
Post Paid vs. Pre Paid
The 2 general variations of mobile phone service plans are pre paid and post paid. With pre paid, you pay for your airtime upfront. With post paid, you pay for airtime at the finish of the month. Post paid plans necessitate a credit check and a contract since you use your airtime before you buy it.
Growth Stats
The cellular phone market continues to grow year after year. In this country, about 80 percent of the people own cellular phones. That trend is growing, though substantially less quickly now than in recent years.
Classic post paid mobile phone service plans were the major segment of the cellphone market and that segment expanded yearly. But, in 2008 the post paid plans started to loose ground. From 2008 to 2009 the total additions of post paid users across all companies dropped 58 percent. In 2009, new subscriber growth essentially halted and post paid plan growth reversed.
In the mean time, pre paid subscription growth is increasing. In 2008 about 50 percent of new cellular subscribers purchased pre paid cellular phone service. The next year, in 2009, in excess of 80 percent of new cell phone subscribers purchased pre paid service plans.
In the past, a prepaid cell phone plan was utilized by a few kinds of people: young adults and folks with bad credit scores. Given that conventional post paid programs call for a credit check, some people have been incapable of buying a conventional post paid cell phone plan. In times past, those people with no credit or bad credit have made up the volume of the pre paid market. The only downside of pre paid programs, up until not long ago, was that pre paid plans were more costly compared to contract plans.
Pre Paid Is Now Inexpensive
Two years ago the price of pre paid programs began to come down. Today pre paid cellular phone programs cost less than contract plans. Many pre paid companies are now actually selling unlimited minutes programs which can be less expensive than contract service plans which have 500 minutes. The present cheap price of pre paid programs and the economic downturn in the economy are fueling the explosive growth of the pre paid mobile phone sector.
Of course, the major carriers aren't completely happy since they generate a good deal more revenue on contract programs compared to they do on pre paid. The way they make more money on post paid plans is that, obviously, those plans are more expensive than pre paid service plans. Traditional contract plans can run in excess of $80 every thirty days even though a pre paid plan with the identical airtime is often as affordable as $40. Second, not only do carriers generate a great deal more revenue on post paid service plans, they also have a secure income stream by locking their buyers in with long term contracts. The 3rd reason contract plans are so financially rewarding for the mobile cellular carriers is that they charge higher prices if you exceed your minutes allowance, oftentimes 25 or 50 cents per minute. This adds up in a short time and numerous people unintentionally run up enormous cell phone bills.
As expected, with pre paid service plans, you don’t have this situation. Pre paid plans are now less expensive per minute and they do not require contracts. Also, should you exceed the airtime that you purchased; you are easily able to add more airtime.
The Future of Mobile cellular Service Plans
Contract cellular phone programs remain popular with clients, however. The main reason is that the phone models that they sell are less expensive, at least upfront. Quite a few shoppers continue to choose post paid programs since they can't afford a $400 phone. The mobile carrier will subsidize the price of the phone when users sign a multi year contract. In contrast, pre paid handsets tend to be more expensive considering none of the price is subsidized. Shoppers have to pay top dollar for pre paid handsets. What consumers do not recognize is that the post paid plans are able to subsidize the cost of the cell phone due to the fact they realize that over the course of that two year agreement they’ll make up the price of the mobile phone (plus so much more.)
Pre paid plans continue to gain market share, despite the fact that the handsets cost more. They simply make more sense for consumers. The economy has been bad for many years and there is no finish in sight. The lower price of pre paid mobile plans will continue to boost their level of popularity and many more users will opt for pre paid plans over the conventional contract plans.
Post Paid vs. Pre Paid
The 2 general variations of mobile phone service plans are pre paid and post paid. With pre paid, you pay for your airtime upfront. With post paid, you pay for airtime at the finish of the month. Post paid plans necessitate a credit check and a contract since you use your airtime before you buy it.
Growth Stats
The cellular phone market continues to grow year after year. In this country, about 80 percent of the people own cellular phones. That trend is growing, though substantially less quickly now than in recent years.
Classic post paid mobile phone service plans were the major segment of the cellphone market and that segment expanded yearly. But, in 2008 the post paid plans started to loose ground. From 2008 to 2009 the total additions of post paid users across all companies dropped 58 percent. In 2009, new subscriber growth essentially halted and post paid plan growth reversed.
In the mean time, pre paid subscription growth is increasing. In 2008 about 50 percent of new cellular subscribers purchased pre paid cellular phone service. The next year, in 2009, in excess of 80 percent of new cell phone subscribers purchased pre paid service plans.
In the past, a prepaid cell phone plan was utilized by a few kinds of people: young adults and folks with bad credit scores. Given that conventional post paid programs call for a credit check, some people have been incapable of buying a conventional post paid cell phone plan. In times past, those people with no credit or bad credit have made up the volume of the pre paid market. The only downside of pre paid programs, up until not long ago, was that pre paid plans were more costly compared to contract plans.
Pre Paid Is Now Inexpensive
Two years ago the price of pre paid programs began to come down. Today pre paid cellular phone programs cost less than contract plans. Many pre paid companies are now actually selling unlimited minutes programs which can be less expensive than contract service plans which have 500 minutes. The present cheap price of pre paid programs and the economic downturn in the economy are fueling the explosive growth of the pre paid mobile phone sector.
Of course, the major carriers aren't completely happy since they generate a good deal more revenue on contract programs compared to they do on pre paid. The way they make more money on post paid plans is that, obviously, those plans are more expensive than pre paid service plans. Traditional contract plans can run in excess of $80 every thirty days even though a pre paid plan with the identical airtime is often as affordable as $40. Second, not only do carriers generate a great deal more revenue on post paid service plans, they also have a secure income stream by locking their buyers in with long term contracts. The 3rd reason contract plans are so financially rewarding for the mobile cellular carriers is that they charge higher prices if you exceed your minutes allowance, oftentimes 25 or 50 cents per minute. This adds up in a short time and numerous people unintentionally run up enormous cell phone bills.
As expected, with pre paid service plans, you don’t have this situation. Pre paid plans are now less expensive per minute and they do not require contracts. Also, should you exceed the airtime that you purchased; you are easily able to add more airtime.
The Future of Mobile cellular Service Plans
Contract cellular phone programs remain popular with clients, however. The main reason is that the phone models that they sell are less expensive, at least upfront. Quite a few shoppers continue to choose post paid programs since they can't afford a $400 phone. The mobile carrier will subsidize the price of the phone when users sign a multi year contract. In contrast, pre paid handsets tend to be more expensive considering none of the price is subsidized. Shoppers have to pay top dollar for pre paid handsets. What consumers do not recognize is that the post paid plans are able to subsidize the cost of the cell phone due to the fact they realize that over the course of that two year agreement they’ll make up the price of the mobile phone (plus so much more.)
Pre paid plans continue to gain market share, despite the fact that the handsets cost more. They simply make more sense for consumers. The economy has been bad for many years and there is no finish in sight. The lower price of pre paid mobile plans will continue to boost their level of popularity and many more users will opt for pre paid plans over the conventional contract plans.