Consumers Looking to Cut Cell Phone Costs, Says NMRC

Millions of Americans may hang-up on their expensive cell phone plans and or cut back on extras such as web, texting and email a news survey for New Millennium Research Council (NMRC) reports .

Two out of five Americans with contract-based cell phones (39 percent or 60.3 million consumers) are likely to cut back on their cell phones to save money if, as is widely expected, the economy gets worse over the next six months to the survey.

The first annual Opinion Research Corporation survey for NMRC on cell phones and economic trends also found that there is potential major shift in consumer habits at the expense of contract-based cell phone service.

More consumers seek to save money in the face of the recession. No fewer than 40 million Americans -- 26 percent of consumers with contract-based cell phone service -- are "more inclined today than ... six months ago to look at a way to save money on your cell phone bill such as switching to a prepaid cell phone service." This group includes 38 percent of those in households making $35,000 a year or less, 32 percent of African Americans and 30 percent of those aged 18-34.

Cell phone extras- such as Internet connectivity, email and texting -- are also likely to take a hit in the economic downturn.

A total of 19 million Americans -- one in five cell phone users with cell-phone extras -- have "considered cutting back" (5 percent) or actually "have cut back" (15 percent) on such features "in the last six months because of actual job loss, fear of job loss, the recession, or any other related financial concerns." More than two out of five cell phone users with extras on their phones (41 percent) say it is "very" (19 percent) or "somewhat" (21 percent) likely that they will cut back on cell phone extras "if the economy gets worse in the next six months." Fewer than two in five (39 percent) say it is "not likely at all" that they will make such cuts in the face of a deepening recession.

• Nearly one in five Americans who now have prepaid cell
  phone service (17 percent) say they switched in the last six months
  from a contract-based cell phone service due to job or
  recession-related concerns. This figure includes 23 percent of 18-34
  year olds and 29 percent of African Americans with prepaid phones.
• The
  ranks of all Americans without a cell phone who have "discontinued cell
  phone service in the last six months because of actual job loss, fear
  of job loss, the recession, or any other related financial concerns"
  includes 29 percent of 18-34 year olds and 28 percent of those living
  in households earning $35,000 a year or less.
• Among
  those who are likely to cut on back on their cell phones to save money
  "if the economy gets worse in the next six months" are 44 percent of
  those aged 18-34, 54 percent of those in households making $35,000 a year or less, and 55 percent of African Americans.
• Two
  thirds of prepaid cell phone customers say they are saving money
  "compared to a landline phone or contract-based cell phones." Fewer
  than three in 10 (29 percent) said they were not saving money.
• Fewer
  than half of cell phone users (48 percent) say that the extras on their
  phone "such as Internet connectivity, email and texting" are delivering
  a "great deal" (29 percent) or "some" (19 percent) value. About one in
  five people see little value in such services. About a third of cell
  phone users (34 percent) have no such extras on their phones.
• More
  than four out five Americans (84 percent) are concerned about the
  economic recession and already have cut back their sending "quite a
  bit" (39 percent) or "somewhat" (45 percent). Only about one in 10
  Americans (12 percent) have made no spending changes as a result of the
  recession. Over half (52 percent) of individuals in households earning
  less than $35,000 a year already have cut their spending "quite a bit."
• Four
  out of five Americans own a cell phone, ranging from 84 percent of
  18-34 year olds to just 68 percent of those age 65 or older. While 91
  percent of those in households earning $100,000 or more have cell phones, less than two-thirds in households earning $35,000
  a year or less (65 percent) have such devices. Nearly one in five
  Americans (17 percent) reports having a prepaid cell phone currently,
  compared to 84 percent with a contract-based cell phone. (There is some
  overlap due to individuals who own both types of phones.) African
  Americans at 22 percent are the group most likely to have prepaid cell
  phones.

The data generated for NMRC is based on the findings of a telephone
survey conducted by Opinion Research Corporation's CARAVAN omnibus. The
survey was conducted among a sample of 2,005 adults (1,002 men and
1,033 women) 18 and older living in private households in the
Continental United States. Interviewing was completed March 5-9, 2009.
The survey was weighted by four variables: age, sex, geographic region
and race to ensure reliable and accurate representation of the total
population. The margin of error for surveys with samples of around
2,000 respondents, at the 95 percent confidence level, is plus or minus
2 percentage points.