Prepaid cell phones now trendy, pricey phone plans not so much

 By D. Scriber  l Published: Wednesday, March 31 2010 11:25

Last year, the New Millennium Research Council, a Washington think tank, released the results of a survey that showed 39 percent of cell phone users -- about 60.3 million people -- were contemplating cutting back on their plans to save money during the recession. It turns out their research was right on the money. In a follow-up today, new research shows that consumers are driving the cell phone market to become more much flexible when it comes to cost. Sorry classy Apple store and your pricey iPhone and data plan through carriers like AT&T. The trendy way to go these days is a prepaid phone of the disposable kind, just like you'd pick up at the local convenience store.  According to NMRC, new prepaid wireless customers in the United States now outnumber new contract-based cell phone providers. "Based on the ongoing recession and the recent surge in attractive prepaid phone deals," the think tank predicts the trend will continue.
In a statement, Jose Guzman, project coordinator for the NMRC said, "We stand by what we forecast a year ago: The era of cell phone penny pinching is officially here. Thanks to the recession, the U.S. cell phone marketplace continues to undergo fundamental changes that will just get bigger as the economic downturn deepens. What is different from a year ago is the explosion in new 'all-you-can-eat' and unlimited prepaid deals as low as $30 and $45 that will remain attractive to consumers long after the current recession is over."
In other words, gone are the days of pricey plans thanks to the thriftiness of your fellow consumers.
According to the most recent available quarterly data:
* 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 US 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.