Why Switching to Prepaid Makes Sense in a Tough Economy

I recently read an article on CNN how more and more people are abandoning their post paid phones and going with prepaid companies like Tracfone, Net10, Boost Mobile, Etc. The reason is quite simple, you simply cut back on your talk time and you can go with an inexpensive Tracfone or whatever. You can still have cell phone service for emergencies and save over 90% in some cases. Of course that is not the only reason, when facing possible unemployment, being tied down to a contract is not where you want to be. After all, what are you going to choose? Your $70 cell phone bill or $70 worth of groceries?

This shift is good news for the consumer. First-quarter earnings from all of the major cell phone carriers indicate that consumers are flocking to the new unlimited prepaid plans instead of the contract post-paid plans. Numbers indicate that post-paid subscriber growth have come to virtual halt with more and more people switching to the increasingly popular prepaid plans. Additional numbers show that nearly 80% of cell phone subscribers growth in 2009 came from prepaid signups. Consider the Net10 Unlimited plan for $79 or the Boost Mobile (with smaller coverage area when compared to Net10) for $50 compared to the likes of AT&T/Verizon/Alltel/Tmobile and their unlimited plans all at around $100. Its no wonder the masses are flocking to prepaid. This shift in wireless consumer habits will undoubtedly lead to lower prices and increased competition between the prepaid and post paid providers.