Comments on: Prepaid wireless service could spur price war

As prepaid wireless services grow in popularity, wireless operators may be forced to cut prices to compete.

[bassman12345]

IT IS ABOUT TIME!

The cell-phone carriers (and communications service-providers in general) charge far too much for what they provide! I absolutely love the new communications services such as cell-phones, but the services-costs are excessively high.

I refuse to go beyond about $25/person (on a family plan), and I'm by no means "cheap". I'll forgo fancy clothes and home furnishings for technology, but the current cell-phone pricing is a bad value.

I'd love to have data-services so I could get a "smart phone", but again, I refuse to go beyond $25/mo. Cell-phone companies can keep their bogus subsidies, which we pay many times over in service-charges!

[sam99999999]

Totally agree. The charges for data services like "text messaging" are orders of magnitude in excess of what those services cost to provide.

ATT charges their "post paid" customers who don't subscribe to a text messaging package 20 cents to send or receive 160 bytes. ***?

Totally outrageous, and the Public Utilities Commission, whose job it is to watch out for this stuff, is nowhere to be found. These carriers deserve to have defections. We need more competition like this.

[does.tv]

Or how about tying their phones to data plans. We have the verizon family plan and recently went in to upgrade our phones.
"I'd like this phone."
"You need to upgrade to the data plan."
"How about this one?"
"Data plan. All of the phones along this wall require the data plan."
"But I don't need it."
"Sorry, but that's the rules..."

[RobertAPierce]

I've been using prepaid (T-Mobile) for years now. I can't figure out why anyone who doesn't use a huge amount of minutes each month would not be on pre-paid. Do the math, it makes absolutely no sense to be on some sort of contract, unless you spend a large amount of your time on the cell phone each day (as, for example, a real estate agent might). Otherwise, say "no" to the overpriced plans and pay for what you actually use.

[businesscontacts]

Welcome to the rest of the world. Here in Panama I paid $5 for my prepaid cell phone and we pay around 10 cents per minute (and that's expensive compared to other countries). The difference here is that the person that places the call pays for it, unlike some other countries in which both caller and receiver pay.

So, if I only receive calls I don't even need to put money into my account.

[markdoiron]

Fifty dollars per month is still too high! I pay $25 every three months for AT&T pre-paid phone with unlimited talk time to AT&T customers (which almost everyone I know has) and a $1/day usage fee (only if the phone is used that day).

When consumers are REALLY strapped, they'll start to assess whether they really need to call their spouse on the other side of the store, whether they really need to monitor e-mail 24/7/365, whether they really need Internet access from their car, whether they really need to send text versus a make quicker phone call. Then, they'll come to the same conclusion I did a couple years ago: A simple voice phone, which allows the rare emergency and occasional time-critical calls, is really all anyone "must have." --mark d.

[fumelo]

While I agree with you on most of your points, I would argue that phone calls are intrusive and cost more than text. My wife and I can keep in touch throughout the day with a few text messages - just to say "hi", share a thought, ask a question. We can respond when it's convenient, and don't have to go through all that "hello" and "talk to ya later" stuff. Granted, we've never been ones to talk on the phone much, ever. We much prefer written communication over voice. A bit old-fashioned perhaps, but much more efficient and effective.

I am hoping for a big change in how mobile providers charge. I don't understand the problem with being able to choose any phone (provided it works on the network - GSM vs. CDMA), paying a monthly standard fee (like $9.99) to maintain access and service, then being charged for what you use, be it voice or data. Because of my choice of phone, I have to have a contract, and the lowest voice minute package is 450 minutes. I might use 50-60 of it a month, usually less. I have well over 5000 roll-over minutes now that I'll never use, but I use the h3LL out of my unlimited text and data. I would prefer prepay, but cannot due to the hardware I prefer. I am considering stepping down to prepay now and will have to again carry more than one device with me, which blows.

Perhaps the mobile companies could offer customized plans: Basic plan ($9.99), per minute voice ($0.10) or packages (500, 1000, etc.), per kilobyte or packages or unlimited, etc. You tailor your plan based upon your needs. If offered I'd switch so fast.

[chris_d]

To Mark: No way! People don't need to constantly send text messages and make pointless phone calls? I don't send any SMS and I'm still alive. I guess it's not a basic need after all.

To fumelo: the reason carriers don't offer what you're looking for is because their goal is to increase ARPU (average revenue per unit). If they gave you the light-use plan you seek, they wouldn't be charging you as much. They also lock down devices here in the U.S. so they can nickel and dime you with their overpriced services. You should be able to go on prepay with a GSM handset though; I don't see why that wouldn't work. Also, small prepay services (airvoice, pageplus) are usually a better value than the major companies (t-mobile being the exception -- their prepay is a good value).

[Hunnter2k3]

I use prepaid here for mobile internet, considering i don't use it that often.
1gig for £10, 3 for £15 and 7 for £25. Very useful when i am away, but a contract would be too much.

In fact, this is the exact same reason i wouldn't pay for an MMO either, unless they start allowing pay-as-you-play methods, i just won't play games that often, even my own. (which is why i would never make anyone pay)

[Universal_Indie_Records]

"A simple voice phone, which allows the rare emergency and occasional time-critical calls, is really all anyone "must have." --mark d."

Unless of course you run your business through the internet and must be connected as much as possible.

[userNoname]

So prepaid user anonymity is no longer an issue? As far as I can recall, prepaid mobile services have been banned in Switzerland due to a potential abuse by terrorist.

[terminalblue]

in the US they are ok. you can literally walk into a gas station and but one and then activate it a few minutes later with phony info....and hopefully it will stay that way.

[whoperson]

Way back in 2000, I got a cell phone with a $40/month plan that was more like $50 after taxes and fees. I found that I used it 1-2 times a month. It was really not worth it, so I eventually dropped it. A few years later I decided that a cell phone for emergencies was a good idea, and after shopping around, I found a pre-paid plan that had a minimum of $15 every 3 months to keep service active. At $5/month that was 1/10th the cost of the previous plan I had. Initially that was all I needed, but now that my kids have grown to be teens I'm finding I use it more and I'm up to about $10/month usage. I've also gotten my 2 kids pre-paid plans with the same carrier, and their usage is similar to mine. So we spend about $30/month for 3 cell phones. The most basic family plans seem to run 2-3 times as much.

[inachu1]

We all know what happens after 10 or so years.

1 big company buys them out and then raises the prices after they merge or some new law to protect consumers and they inflate prices.

Same ole same ole.... same old game..... drop price to get tons of consumers hooked then once saturation takes hold then mergers happen.

History sucks for consumers.

[wildbillc777]

It's about time. I lived in Europe for several years and upon returning was enraged at how cash greedy and backward the US cell phone providers are. In Europe, your service is prepaid on a chip, and you can use whatever cell phone you want to mount the chip in. Phones are cheap and interchangeable. You only pay for what you use, and can recharge your account by buying a scrip card at nearly any place of business. The scrip card has a code which when dialed on your cell phone, recharges your account.

I am sick to death tired of being indentured by expensive contracts, early cancellation fees and grotesquely expensive phones. By the way, the per minute fees for US cell services are immensely more expensive than in most of Europe.

Yes we are getting ripped off in a big way. I bought a phone for my 17 yr old's birthday yesterday. According to a popular "what it cost to manufacture" web site, the phone I bought costs less than $60 to manufacture, but the cell phone provider charged me almost $400. No wonder people are enraged and fleeing to prepaid services.

I for one would LOVE to see a revolution in cell phone services in the US. The general public has been getting needlessly ripped off because they don't know any better. Time for change, time for the big cell providers to wise up. Nothing worse that corporate america gouging the little guys while using advertising to convince them that they are saving money. Lacks integrity, doesn't it?

[ofmyony]

I love watching executives panic and make foolish statements like Dan Hesse. His company is in dire straights and he is being fed a pill he don't like.

Consumers are smart and realize contracts are a ripoff. They want cheap phones that do what they want. So a comment to the mobile carriers. The gravy train has left the building you need to be competitive of fail. Consumers are now empowered.

Oh I have one more immature thing to say to Sprint. Ha Ha Ha look who is crying now you Contract Peddling Dealer!

[jrw88]

I agree with the earlier comment: "I can't figure out why anyone who doesn't use a huge amount of minutes each month would not be on pre-paid. Do the math" I've been using a TracFone since Cingular-at-the-time ended TDMA and wanted to force me to a new $40/mo plan. With TracFone I pay less than $100 A YEAR (service + about 1000 minutes), make several calls a week, and have minutes left over when I repeat the drill a year later. (I carry an ipod touch for messaging and to keep my geek cred:)

[mcflyer54]

This is a riot. People will pay for what they "think" they need. 99% of cell usage is a waste of time and needless however, if the person paying the bill thinks that it is a worthwhile expense and can afford it then having the phone regardless of cost is what they are going to do. I'm always amazed when I find someone who has lost their job, maybe their car and/or home but continue to pay $100+ per moth for a cellphone. The argument is always that same, that they "need" it for possible job opportunities yet they haven't received that all important job offer and it's been more than 6 months. Once people realize that they honestly don't need to be tethered to a cellphone 24/7 they might actually wake up to the advantages of a pre-paid plan - a plan that not only can save you money but can actually give you back some of the life you've previously wasted on inane and mindless cellphone chatter.

[PrepaidWirelessGuy]

Yup; makes perfect sense! I have a page describing postpaid death here: http://www.prepaid-wireless-guide.com/postpaid-wireless-demise.html

The comment, however, regarding postpaid subscribers being more profitable is not necessary true. Though historically prepaid has been geared towards the cost conscious, and hence, they spend less, with the shift in the general population, those figures will change. Moreover, as prepaid phones are less heavily subsidized, assuming the service is good and customers are happy and stay long enough, their profitability will actually be higher than with postpaid. i.e. Lower CPGA (cost per gross add).

Carriers in other countries like Europe are able to make money with a high penetration of prepaid; US carriers need to adapt. Also, given that handsets are generally getting cheaper, and prepaid providers are starting to offer smartphones and the like, postpaid is truly on its way it. It simply no longer makes sense.

[lonestarState]

Cricket Cricket! Is the way of the future, contract mobile phones is so 2007.... I pay $30 unlimited text and talk. All we need now is the iPhone and the Pre and every contract carrier would simply seize to exist.

[bajadesperado]

Marguerite,
Would you please investigate the billionaire Carlos Slim of Mexico of the TELMEX/TELCEL fame providing cell services worldwide. I live in Mexico and use Telcel and Movistar prepaid cell services and despite his policies he has an incredible business model. if you investigate his rates ,cost of unlocked phones with sim cards, his recharge card and instant minutes model you will see that he makes a ton of $$$$$$ and provides the world's worst service. BUT his business model works and brings money $$ in from everyone in the country at the pace of $20/$30/$50/$100/$200/$500 pesos per purchase which is reasonable for the skimpiest budget ,you buy what you need or want when you want or need it.
He also has monthly plans etc. but the majority of customers are on buy what you need. We are also vendors of the recharge minutes and phone cards for TELCEL and Movistar.. You would be surprised at his business model. Study it and report on it.. It wouldn't hurt some of the US cell boys to adopt this model if they need revenue and fast and tons of customers.....thanxxxxx.(ps. rate of exchange is about 12.5 pesos per dollar now.) you might compare his mexico model to his US model and the differences of the effect of Us law on his model....Interesting!

Get a Tracfone!

My wife and I have been using it for years!

We spend $20 apiece for 3 months service.