Why Prepaid Wireless Is A Better Choice Than Monthly Rate Plans
07/5/2008 - Society
At one time prepaid wireless plans were considered low profile, and even second-rate options. But with the introduction of services like Net 10 wireless prepaid users can now have a level of quality and control previously impossible in the world of pay as you go.
New prepaid wireless providers are offering top brand name phones and a wide array of models. No longer do prepaid users have to settle for sub quality equipment, and the full range of options from talk and text to pics and Web access are now available without rigid monthly agreements.
The fact is cell phone users are growing tired of the one-sided, somewhat ludicrous contracts and other drawbacks of plugging into a set monthly plan. Wireless communication is no longer a novelty and yet the major service providers continue to charge as if it is. It’s not uncommon for a customer with multiple lines to pay $300 per month for reasonable use and no overages, and the decision to discontinue typically results in hefty “breach of contract” fees.
Wireless companies seem to have little regard for the customer in a market that is teeming with demand and a near unlimited supply of prospects. But that could change dramatically if the current trend of dropping the contract and going with a prepaid provider continues.
Approximately 60% of all worldwide wireless users are prepaid customers at the time of this writing. And many consumer research firms predict this number will continue to grow for the following reasons:
Over 80% of all wireless comments logged at Planet Feedback, the Web’s most active consumer feedback portal with millions of viewers per month, are complaints about plan rates and contract terms.
Focus groups built around wireless customers indicate the monthly plan consumers who commit to a contract of less than $20 per month are actually paying up to 52% when the bill arrives. Similar discrepancies were found with plan rates of higher amounts as well.
Another study suggests that 78% of wireless minutes purchased through a set plan go unused during the course of a month. This is an enormous waste of money, and with prepaid wireless the problem simply does not exist because the customer owns his or her minutes until they are used.
It is entirely conceivable that standard monthly plans will eventually become a rare, luxury service. With most major companies making little effort to reduce rates or contract strictures it is unlikely their retention rates will improve in the years ahead.
Interestingly, nearly all wireless companies now have prepaid options as well. This is perhaps a sign that major players in the industry are prepared for the eventual demise of the contract service.
Most prepaid offers made by companies like Alltell and Verizon, however, are a far cry from true prepaid such as that offered by companies like Net 10. In most cases the former require customers to pay full price for initial handsets and charge unreasonable rates per minute.
A consumer is much better off doing business with a dedicated prepaid provider.
