Why Prepaid Wireless?

Why prepaid wireless?  This is a really interesting topic!  It has become more interesting in recent years as the prepaid market has changed so dramatically.  No contract wireless has become a hot topic that's in the media virtually every day.  Let's review the standard reasons why prepaid wireless has drawn so much attention, and then talk about why things are so much different now.


Back when it first launched, people were drawn to prepaid wireless because of the following benefits:

• Doesn't require a credit check - People who wanted a postpaid account but couldn't qualify would get prepaid.

• Doesn't require a deposit - People with lower credit would often be required to put down large deposits in order to get a postpaid account.

• No surprise bills - Anyone who has had a postpaid account has at one time or another received a large bill due to extra charges that were completely unexpected.

• Cost control - Similar to #3, there's no way to spend more than expected because you know exactly how much you're adding to your account.

• Anonymity - Prepaid wireless does not require a name, address, or social security number.  Though laws are in play that are seeking to erode this benefit in the spirit of national security.

However, with these benefits, customers also had to make certain sacrifices:

• Higher handset prices - Due to the fact that there is no contract, carrier handset subsidies are lower, and often zero (i.e. no subsidy at all).

• Higher price per minute - For the convenience of no commitment, you had to pay a lot more per minute.  So, ironically, heavy prepaid customers often pay more per month than the average postpaid consumer.

• Limited services - With the objective of keeping operational costs low, and the thought that prepaid customers were less valuable, the amount and breadth of services was often limited.  For example, games, GPS navigation, and sometimes even voicemail, were either unavailable or expensive add-ons back when no contract wireless first launched. 

So what's different today?

• Per minute pricing has come down so low, that with the right plan, you can actually get prices that are the same and often lower than postpaid plans!

• The variety of plans offered is astounding, including monthly and unlimited plans, so going prepaid no longer requires any real sacrifice in terms of the available plans.

• With increasing competition in prepaid and in the wireless industry in general, handset pricing has come down considerably.  So although you'll often pay more for your phone than you would if you had a postpaid contract, the prices are extremely reasonable.

• The quality and selection of phones has improved dramatically, including high end Android and iPhone smartphones.

• You can get most, if not all services on even the most basic prepaid plans. 

Why Prepaid Wireless - The Conclusion!

The answer to why prepaid wireless is actually a question in return.  Why get a postpaid plan?!  Consider that for access to the same or similar phones, the same services, and the same network, you don't have to be tied to a contract, including no surprise bills.  I know what you're thinking; it's too good to be true?!  Well, yes, there are still some considerations (see below).  But generally speaking, in my opinion, prepaid will continue to grow and take over postpaid as the dominant choice, and we've already seen a shift in the mindset that people have towards prepaid.  More and more, prepaid will move away from its status as a second class product, to the product of choice for most, even those with great credit.  Just say no to Cell Phone Contracts!


Considerations:

Note that not all prepaid carriers are nationwide, though most have accomplished that at this point through roaming agreements with other carriers, and they don't charge customers for roaming.  While handset selection has increased dramatically, the latest and greatest handsets tend to take some time to show up on prepaid.  However, we've seen that lag decreasing significantly in recent years.  Some prepaid providers still charge reload fees in self-service channels, which is simply unacceptable.

Be Heard!  Let prepaid wireless providers know what you want; fill out the survey now.