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JuneBuggie

by Amy
(U.S.)

If both the contract and prepaid services had both the same phone features and rates I would have to go with the no contract. The point of the contract is to make money from what was loss from that "$300 dollar phone marked at $50 dollars." Seems like a good deal at first, but in today's economic woes for 2009, a contract can be seen as a potential lethal boa waiting to constrict its prey. Even the major cell-phone companies are feeling the squeeze as having to lay off thousands of their employees, not to mention the citizens without a job.

Another point is the phone quality. The downside to prepaid is the quality of the phone and the pricing of it. To be honest pre-paid cell-phones are priced as though they are "newer," but some of them can be as old as 4-years or more (and the quality of the phone can be junk). Is a 4-year old phone worth that $129.99 or $169.99 that a company is asking? How about $200 or $300?.

However assuming that the features are exactly the same and the rates on both contract and prepaid, I would have to go with the prepaid phone. Paying that $200 plus that extra $40 for service is a lot upfront but in the long-run can be saving. With the freedom of no binds (coughcontractscough) a person can use the same features as a regular cell-phone and STILL have the freedom to turn their service on or off basically at any time.

The last thing anyone wants is to be stuck with no money and having to pay a whopping $200 early termination fee on top of any other fees associated with a contract because of events happening in this time of uncertainty.

Comments for
JuneBuggie

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Feb 26, 2009
You make a great point!
by: PrepaidWirelessGuy

Hi Amy - Thank you for your comments; you make some great points. I especially liked your analogy with the boa ;-).

Your comment regarding phone quality is a good discussion. There are a lot of prepaid providers that sell refurbished handsets. This allows them to avoid large subsidies, which enables them to have a profitable business model should customers not stay with them long enough to break even (given that there's no contract or penalties for leaving).

However, that shouldn't mean that phones should be poor quality! Not sure if anyone else has had this experience, but when I've replaced a damaged phone thru handset insurance, they typically send a refurbished phone. I find these phones to often be better quality, believe it or not, because they've undergone a more rigorous quality check. i.e. I'd often prefer to have a refurb than a new one as they often seem to be solid and less buggy. Don't get me wrong though, I've seen some pretty cruddy refurb prepaid phones in the prepaid market that I'm surprised companies want to put their brand on.

You're also right on regarding prepaid providers often selling phones that even though they are new, are models that are years old! These are often procured from OEMs and/or carriers that have old inventory that they can't unload. This offers great value to customers, however, leaves them with a pretty unexciting handset.

I see that as prepaid evolves, and the cost of handsets and features continues to decline, that prepaid customers will be able to get the same great, latest and greatest handsets without having to make any sacrifices. And for those we want a super duper cheap handset will still have access to refurbs and old phones.

The reality is that customers should be able to want into a wireless store and pick their phone and then pick the way they want to pay (prepaid or postpaid). There shouldn't be any restriction on getting the latest phone, and only the price of the phone would change depending on whether you go prepaid or sign up for a one, two, or three year contract.

At least that's my vision of the future!

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