First impressions are lasting ones and the advent of Prepaid cell phone services a few years resulted in some negative impressions that the industry would like to leave behind. Recently, the best of the Prepaid providers have made dramatic and fundamental changes to their services that should go a long way to putting the once poor substitute on an even footing with more traditional, contract based wireless providers.
Foundations of a Reputation
We ve all heard the conjecture: Prepaid cellular service if for people who can t qualify for real wireless service. Like many generalizations, there s some basis is truth. Opening a typical postpaid wireless account includes be subjected to a credit check. For any number of reasons, lots of folks can t meet the standards required by the wireless companies whether it be a past credit problem or, very commonly, younger people who simply haven t yet established a credit history. The result is that service is denied or is dependent on making a hefty security deposit of up to $400. This was, and remains, a reason that many opt for Prepaid service. Prepaid cell phone service has always been free of credit checks.
Per minute pricing of Prepaid cellular service has also been at issue. While true that service can be purchased in small increments, the real price per minute can be deceptively high. The stigma that goes with overpaying for phone service is very much akin to the paying astronomical credit card interest rates because of failing to qualify for better.
Finally, in an environment in which one s identity is somehow linked to the sophistication of the mobile device in his pocket, Prepaid phones have generally been viewed as ground chuck in a filet mignon world.
Prepaid Gains Stature
The best of the Prepaid cell phone providers have made remarkable progress in overcoming the most important reasons for avoiding their services. The most notable change has been with the introduction of flat rate, everything included monthly pricing plans. Boost Mobile and Cricket have both debuted unlimited plans for $50 monthly that not only include not only unlimited local and domestic long distance but also restriction free text and multimedia messaging and wireless web access. That s particularly remarkable at a time when Sprint s heralded and amazingly similar Simply Everything plan costs $99.99 per month. Spring is the parent company of Boost Mobile.
Competing service providers like Virgin Mobile, Net10 and regional carriers MetroPCS and U.S. Cellular offer programs that differ from those leading carriers only in relatively minor pricing, feature and coverage details.
In addition to the unlimited plans, all of the leading Prepaid providers now offer a range of creative service plans each designed to satisfy the requirements of various segments of the cell phone markets. Some are monthly offerings with fewer options than the unlimited plans but at a lower price. Others offer flat rates on a daily basis but only charge on days that the service is actually used. That can be a big savings for users who don t need their phones every day. There s also a wide variety of pay-as-you-go plans that allow customers to very specifically customize their charges to individual needs, paying only for services such as voice calls, text messaging, email and other web access as they are used.
Credit the Economy
Prepaid cell phone use in the U.S. is growing rapidly, particularly over the past year. Indeed, new subscriptions to more prominent post-paid cell service have been, at best, flat. Worst case estimates are that net additions to these services are off by more than fifty percent in 2009. During the same period, an estimated 70- to 80-percent of net new users of wireless service have come via the Prepaid route.
It could well be that the inspiration for the landmark improvements in Prepaid cell phone service is based on a flagging economy. But the undeniable reality is that, for whatever reason, Prepaid providers have made huge steps in making their products more appealing. Whatever the reason for the improvements, the consumer is ultimately the beneficiary. We look to other Prepaid providers to follow the lead of the best services in offering more consumer friendly programs. The best of the unlimited plans are even likely to cause postpaid carriers to rethink some of their premium plans. After all, it won t take consumers long to figure out that the same all inclusive plan they re paying $100 a month for is available from Prepaid companies for half the price.
Still Room to Improve
There s been less progress in the Prepaid world with regard to advanced phone features. That s likely based fact that contract based cellular plans subsidize phone prices heavily in exchange for the contractual obligations that customer assume when purchasing a phone. It s not unusual for the purchase price of high end devices, especially smartphones, to be subsidized by $200-$300 or more. The payback for the cellular provider comes in the form of the monthly voice and data fees that are charged for the duration of the contract period. With no such contract to offset the subsidy, Prepaid cell phone companies are left with little alternative but to charge closer to the real price of the device which puts the most advanced phones out of reach for most people. Nonetheless, more desirable Prepaid devices are slowly becoming available as camera phones, wireless Bluetooth connectivity, media players and web access define the mainstream. Don t be surprised if someone s ingenuity soon finds a way make the best devices attainable.
We encourage you to peruse our Prepaid Cell Phone Providers site for details of the progress that s been made. For a comparison to contract based services, take a look at the side-by-side, objective reviews featured on our Cell Phone Providers site.