Consumers are cutting costs and opting less expensive prepaid cell phones, a prediction that was forecast last year by the New Millennium Research Council
(NMRC).
The 4th quarter of 2010 marked the first time that the number of new prepaid wireless customers in the U.S. outnumbered new contract-based cell phone providers,
according to industry data from both Ovum/Datamonitor and IDG. Based
on the ongoing recession and the recent surge in attractive prepaid
phone deals, NMRC expects the trend in favor of prepaid cell phone use
to be evident again when industry subscription data is reported for the
1st quarter of 2010 and throughout the rest of the year.
New prepaid cell phone subscribers accounted for nearly two thirds (65 percent) of the 4.2 million net
subscribers added by U.S. phone carriers in the fourth quarter of 2009.
- The prepaid segment of the wireless market grew by 17 percent in the 4th quarter of 2009 to 54.4 million subscribers, up from 46.3 million in the same quarter in 2008. By contrast, contract-based cell phone service grew only 3 percent over the same period of time.
- One out of five cell phone subscribers are now using prepaid phones.
- The prepaid segment represents a larger proportion of subscribers in the U.S. than ever before, hitting 20 percent in the 4th quarter of 2009, up from 18 percent at the end of 2008.
- Overall, there were 285 million wireless subscribers in the U.S. at the end of 2009.
Low-cost prepaid services are expanding all over the country Cricket will be selling BlackBerry and Android smartphones and is now offering total coverage.
One year ago, NMRC
released a survey on March 19, 2009 of
more than 2,000 Americans conducted by Opinion Research Corporation
(ORC) showing that 39 percent or 60.3 million were contemplating cutting
back on their cell phones to save money if the recession continued.
NMRC correctly noted that the 2009 data “strongly suggest that a
recession-related shift in attitudes and purchasing habits is already
underway.” (For more information, go to http://newmillenniumresearch.org/news/031909_NMRC_ORC_cell_phone_survey_news_release.pdf.)
On October 15, 2009, NMRC issued a
follow-up
statement that the explosion over the summer and early fall in
increasingly inexpensive and diverse prepaid wireless cell phone plans
represented a likely “tipping point” in consumer habits. (For more
information, go to http://newmillenniumresearch.org/news/101509_media_availability.pdf.)