The cell phone market has changed in the past several years. Though the total cellular phone market continues to grow, conventional postpaid plans are now getting smaller in overall market share. Postpaid programs are rapidly being succeeded by less costly prepaid plans.
The two typical types of mobile cellular service plans are prepaid and postpaid. Prepaid plans allow you to pay for your airtime upfront. With postpaid plans - otherwise known as contract plans, you pay for your minutes at the end of the month. Postpaid plans require a credit check and a contract due to the fact you pay for your minutes after you have used them.
The cellular phone market continues to grow each and every year since its beginning. In the America, about 80% of the inhabitants utilize cell phones. That growth pattern continues to increase, however a lot more slowly today than in preceding years.
Standard post-paid phone service plans are the main component within the cell phone market and that segment grows yearly. Having said that, in 2008 new subscriber growth began to slow. From 2008 to 2009 the net additions of new subscribers through all major carriers fell 58%. The following year post-paid growth literally reversed and its share of the total market is shrinking.
Meanwhile, prepay subscriptions are increasing. In 2008 in excess of 50% of new cellular phone users signed up for prepay phone service. The next year, in 2009, in excess of 80% of mobile cellular buyer growth came from prepay service plans.
Historically, prepaid mobile plans had been used by only two variations of individuals: kids and people with negative credit. Due to the fact traditional post-paid programs call for a credit verification, many people were unable to purchase a conventional post-paid cell phone. In times past, those people with negative credit or no credit have composed the bulk of the prepaid market. The only disadvantage of prepaid programs, up until very recently, was that prepaid cell phone service plans had been much more costly as compared with post-paid programs.
A couple of years ago the price of prepay service plans began to come down. Today prepay mobile service plans are significantly cheaper than contract programs. Many prepay carriers are now supplying unlimited minutes service plans which are cheaper than equivalent contract plans that have 500 minutes. The current low cost of prepay plans and the current recession are fueling the explosive growth of the prepay cellular industry.
As expected, the cell phone companies are not completely happy with this, given that they earn significantly more profit on contract programs when compared to prepay. There are several reasons for this is. The first is that contract programs are more expensive than prepay plans. Classic contract plans can run in excess of $80 a month whereas a prepay plan with comparable airtime could be as inexpensive as $40. Second, not only do contract plans earn more profit for the cell phone companies, but they have a risk-free income stream by locking their customers in with long-term contracts. The 3rd reason contract programs are so cost-effective for the cell phone companies is that they outrageous fees if you exceed your minutes allocation, usually 25 or 50 cents for each minute. This can add up rapidly and many folks have accidentally run up huge cellular phone bills because they went over their minutes.
Obviously, with prepay service plans, you don't have these problems. Prepay programs are now less expensive per minute and they don't require service contracts. In addition, should you exceed the airtime that you have paid for, it is easy to just purchase more airtime.
Contract cell phone programs remain popular with buyers. The most important factor is that the handsets that they offer are cheaper, at least upfront. Many people continue to choose post-paid service plans because they can not afford a $500 mobile phone. The mobile phone company will finance the price tag of the cell phone when consumers sign a 2 year contract. When compared, prepaid models are definitely more expensive since none of the price is subsidized. Clients have to shell out top dollar for pay as you go models. What customers do not recognize is that post-paid service plans are able to pay for the price tag of the mobile phone since they recognize that over the course of 2 years they'll make up the cost of the handset.
Prepaid plans continue to increase in popularity, though. They just simply make more sense for users financially. We seem to be stuck in the current recession. The reduced rates of prepaid phone plans will continue to boost their popularity and a great many more consumers will pick prepaid service plans over the classic postpaid programs.
The two typical types of mobile cellular service plans are prepaid and postpaid. Prepaid plans allow you to pay for your airtime upfront. With postpaid plans - otherwise known as contract plans, you pay for your minutes at the end of the month. Postpaid plans require a credit check and a contract due to the fact you pay for your minutes after you have used them.
The cellular phone market continues to grow each and every year since its beginning. In the America, about 80% of the inhabitants utilize cell phones. That growth pattern continues to increase, however a lot more slowly today than in preceding years.
Standard post-paid phone service plans are the main component within the cell phone market and that segment grows yearly. Having said that, in 2008 new subscriber growth began to slow. From 2008 to 2009 the net additions of new subscribers through all major carriers fell 58%. The following year post-paid growth literally reversed and its share of the total market is shrinking.
Meanwhile, prepay subscriptions are increasing. In 2008 in excess of 50% of new cellular phone users signed up for prepay phone service. The next year, in 2009, in excess of 80% of mobile cellular buyer growth came from prepay service plans.
Historically, prepaid mobile plans had been used by only two variations of individuals: kids and people with negative credit. Due to the fact traditional post-paid programs call for a credit verification, many people were unable to purchase a conventional post-paid cell phone. In times past, those people with negative credit or no credit have composed the bulk of the prepaid market. The only disadvantage of prepaid programs, up until very recently, was that prepaid cell phone service plans had been much more costly as compared with post-paid programs.
A couple of years ago the price of prepay service plans began to come down. Today prepay mobile service plans are significantly cheaper than contract programs. Many prepay carriers are now supplying unlimited minutes service plans which are cheaper than equivalent contract plans that have 500 minutes. The current low cost of prepay plans and the current recession are fueling the explosive growth of the prepay cellular industry.
As expected, the cell phone companies are not completely happy with this, given that they earn significantly more profit on contract programs when compared to prepay. There are several reasons for this is. The first is that contract programs are more expensive than prepay plans. Classic contract plans can run in excess of $80 a month whereas a prepay plan with comparable airtime could be as inexpensive as $40. Second, not only do contract plans earn more profit for the cell phone companies, but they have a risk-free income stream by locking their customers in with long-term contracts. The 3rd reason contract programs are so cost-effective for the cell phone companies is that they outrageous fees if you exceed your minutes allocation, usually 25 or 50 cents for each minute. This can add up rapidly and many folks have accidentally run up huge cellular phone bills because they went over their minutes.
Obviously, with prepay service plans, you don't have these problems. Prepay programs are now less expensive per minute and they don't require service contracts. In addition, should you exceed the airtime that you have paid for, it is easy to just purchase more airtime.
Contract cell phone programs remain popular with buyers. The most important factor is that the handsets that they offer are cheaper, at least upfront. Many people continue to choose post-paid service plans because they can not afford a $500 mobile phone. The mobile phone company will finance the price tag of the cell phone when consumers sign a 2 year contract. When compared, prepaid models are definitely more expensive since none of the price is subsidized. Clients have to shell out top dollar for pay as you go models. What customers do not recognize is that post-paid service plans are able to pay for the price tag of the mobile phone since they recognize that over the course of 2 years they'll make up the cost of the handset.
Prepaid plans continue to increase in popularity, though. They just simply make more sense for users financially. We seem to be stuck in the current recession. The reduced rates of prepaid phone plans will continue to boost their popularity and a great many more consumers will pick prepaid service plans over the classic postpaid programs.
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Learn more about prepaid cell phones plans. Stop by Sarah Mitchel's site to find out all about prepaid services.
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