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Prepaid Wireless: A Quiet Revolution?

Sep 13, 2008
At the time this article was written over 60% of global wireless users prepay their bills. The majority of people on our planet leverage pay as you go plans instead of the monthly rate plans offered by the major service providers.

And in recent years all major wireless providers have rushed to not only implement pay as you go plans, but also to place this option at the fore of their marketing campaigns. It is entirely possible that monthly postpaid plans will become a novelty item within the next half-decade.

The thing is, consumers are tired of being taken to the cleaners month after month by wireless providers. Taxes, fees, and hidden charges make the average wireless bill 20% higher than what customers were told by sales reps, and overage charges are borderline extortionist.

It's odd, to say the least, how the wireless talk industry went from a high priced luxury to an out-in-the-open game of "rip off the consumer" in just a few short years. The technology is not new, and handsets are being given away by every company with airtime to sell.

In fact the global tower network is so strong and well-maintained that experts estimate only a tiny portion of access fees go toward new equipment and labor expenses. Wireless phone services are rolling in huge profits and still nailing their customers to the wall with outrageous monthly rates, overage penalties, and countless nickel-and-dime charges on every bill.

The mass migration to prepaid service could well be the average consumers' way of taking control of their mobile communication by not giving the wireless companies a penny more than needed for their monthly usage. Once thought of as the poor mans' cell phone alternative, pay as you go options are now being embraced even by consumers who have the good credit to acquire their choice of postpaid plan.

Most of us are happy to pay for a quality product or service. But there's just no excuse to find new ways to shake a few extra bucks out of your customer base every time they turn around.

In many cases customers are being locked into new contracts each time they buy car chargers, carrying cases, and other minor accessories, and often the sales reps don't even have to tell them this is the case! Fine print on the initial service agreement indicates a contract extension with all new purchases, and thus the average user finds themselves legally obligated to pay their bill for a few years longer than expected because they bought a few service enhancements.

Consumer feedback Websites are overflowing with complaints and negative user comments about wireless contracts, hidden fees, and very poor customer service from the major providers of monthly postpaid plans. On the other hand, very good reviews are often given to smaller companies that specialize only in prepaid service.

Organizations like TracFone, Virgin Mobile, and Net 10 are enjoying tremendous growth, and not just as the result of younger consumers with no established credit. These services may very well be the wave of the wireless future because they are not "tainted" with the negative stigma of monthly contracts and bills loaded with hidden monthly fees and charges.

Most companies specializing in prepaid service provide free handsets for their users and simplified, affordable airtime fees. On the other hand, traditional wireless services require their prepaid users to pay full price for handsets and typically charge three times the per-minute rate of the specialty services.

In other words, prepaid users will get a much better deal with a service like Net 10 or Virgin Mobile than they would with a pay as you go plan offered by Verizon or Alltel. These "pure" prepaid vendors have deals with the major networks that allow them to provide airtime and reception quality that compares with any postpaid service.

It will be interesting to check the stats five years from now. It's not unreasonable to expect prepaid wireless to be the new standard at that time, with postpaid contracts being relegated to a high priced "status symbol" of the eccentric consumer.
About the Author
To take advantage of prepaid wireless that puts the control back into your hands visit Net 10 Wireless now. All Net 10 Phones include 300 minutes of airtime, and you can choose from top brands and models that provide the full range of options from talk and text, to pics and Web access.
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