More Wireless Subs Switching to Prepaid Says Net10

Many postpaid subscribers are considering giving up their plans, according to a new study by prepaid cellular provider Net10.  One in five U.S. cell phone consumers with contract-based service is likely to switch in early
2011 to less expensive unlimited prepaid wireless service with no
early-cancellation penalty.

Nearly one in ten additional
contract-based cell phone users would consider switching if they were
not currently subject to an early-cancellation penalty, according to the
first annual "Net10 Prepaid Wireless Consumer Trends National Poll" conducted by Infogroup/ORC for the independent New Millennium Research Council (NMRC).The new survey of 715 U.S. cell phone consumers also found that:

• Overall,
  roughly half (47 percent) of U.S. cell phone users with contract-based
  service - an estimated 57.8 million consumers - are "very likely" (23
  percent) or "somewhat likely" (24 percent) to switch to "a no-contract
  or prepaid phone" when "your cell phone early-cancellation penalty
  period ends and you can switch at no cost."  
• Among U.S. cell
  phone consumers with contract-based service who say they are unlikely to
  switch to no-contract/prepaid service in the next six months, well over
  half (56 percent) are "very or somewhat open to switching to a
  no-contract or prepaid cell plan at some point in the future, but
  you're not planning to do so now."  Fewer than two in five
  contract-based phone users (38 percent) indicated they "don't see
  yourself ever switching to a no-contract or prepaid cell phone."
• The
  top four reasons cited for U.S. consumers to switch to a
  no-contract/prepaid cell phone (including "major" or "somewhat" of an
  impact): 68 percent "needed or wanted to cut cell phone bill costs;" 58
  percent were "paying too much for a Smartphone with features you didn't
  need or use;" 49 percent were "unhappy with (an) early-cancellation
  penalty for contract-based phone service;" and 48 percent cited the
  "recent availability of unlimited talk, text, Web and email access on
  no-contract basis for about $50 a month."

While the new national survey was underwritten with a grant from
TracFone's Net10, the Council maintained 100 percent editorial control
over the poll, the analysis of the results, and the manner in which the
information is released to the public.

The "Net10 Prepaid Wireless Consumer Trends National Poll" survey, conducted by Infogroup/ORC for the independent New Millennium Research Council, also showed the following:

• One
  in five U.S. cell phone users with contract-based service - an
  estimated 24.6 million  consumers - are "very likely" (8 percent) or
  "somewhat likely" (12 percent) to "switch in the next six months
  from your contract-based cell phone service with an early-cancellation
  penalty to a no-contract cell phone with unlimited talk, text and Web or
  email access and no early-cancellation penalty."  Nearly one in ten
  additional contract-based cell phone users (9 percent or an estimated
  11.7 million consumers) "would consider switching, but you're still
  going to be in your early-cancellation penalty phase six months from
  now."
• Among U.S. cell phone consumers with a contract-based
  service who say they are unlikely to switch to no-contract/prepaid
  service in the next six months, the Number 1 reason cited for
  reluctance - "You like your current phone and don't want to lose it and
  its features," which was cited by over six in ten (61 percent) as having a
  "major impact" (39 percent) or "somewhat of an impact" (23 percent). 
  The Number 2 reason for reluctance - "You would be subject to a
  cancellation penalty and you don't want to pay that," which was cited by
  over half (52 percent) as having a "major impact" (33 percent) or
  "somewhat of an impact" (19 percent). 
• Nearly six in ten (59
  percent) U.S. cell phone users with contract-based service - an
  estimated 72.5 million consumers - are "very likely" (36 percent) or
  "somewhat likely" (23 percent) to switch to "a no-contract or prepaid
  phone" when "you could get unlimited talk, text and Web or email access
  for $50 a month with no penalty."
• Over half
  (53 percent) of U.S. cell phone users with contract-based service - an
  estimated 65.1 million consumers - are "very likely" (26 percent) or
  "somewhat likely" (27 percent) to switch to "a no-contract or prepaid
  phone" when "you could get unlimited phone use for $50 a month, with no penalty for early cancellation for a smart phone that costs you less than $100."
• Over two in five (42 percent) U.S. cell phone users with contract-based
  service - an estimated 51.6 million consumers - are "very likely" (17
  percent) or "somewhat likely" (24 percent) to switch to "a no-contract
  or prepaid phone" when "you could tailor your phone bill to your needs,
  switching between unlimited phone use for $50 a month for some months and $25 a month for 750 minutes other months."
• More
  than one in ten U.S. cell phone users with contract-based cell phones -
  12 percent of or an estimated 18.1 million consumers - are either "no
  longer in the penalty period and are actively exploring less expensive
  service" (7 percent) or feel "you pay too much for your cell phone bill,
  but you don't know if your early-cancellation penalty is still in
  effect or if it is expired" (5 percent).  Nearly one in five other
  consumers (19 percent) say - "You pay too much for your cell phone bill
  and you feel trapped by the penalty that you know you would pay for
  cancelling your service early."  Fewer than six in ten (57 percent) agree
  with the following statement - "You are satisfied with your cell phone
  bill and would not switch because of cost."
• How recently have consumers switched to no-contract/prepaid service?
  • 25 percent - have only had no-contract cell phones.
  • 33 percent - more than two years ago.
  • 16 percent - in the last one to two years.
  • 9 percent - between six months to a year ago.
  • 14 percent - in the last six months.
• Additional
  reasons cited for U.S. consumers to switch to a no-contract/prepaid
  cell phone (including "major" or "somewhat" of an impact) - 40 percent
  mentioned "poor phone service, such as dropped calls;" 40 percent cited
  "poor customer service" and 36 percent mentioned "recent availability of
  Smartphones on a no-contract basis."  (See top four reasons at the
  beginning of this news release).
• Two in five cell phone
  consumers (39 percent) have a "basic, no frills cell phone that you use
  only or primarily for making phone calls," 28 percent "a cell phone that
  makes calls, but is also designed for a lot of texting."  Another 11
  percent say they have "Blackberry for personal use," 7 percent an
  iPhone, 7 percent an Android smart phone, and 4 percent some other kind
  of smartphone.