Feb 23 2009
Dialing For Dollars Before Dialing
NYTimes.com – More Customers Give Up the Cellphone Contract
I’m not surprised at all that this is happening. I’ve been using a pre-paid phone for many years now. I’ve seen way too many people get eaten alive by cell contracts and it has worked out well for me. The cost per minute is higher and it may not be the best option for high volume users. It’s a lot easier to manage the time used on the phone and budget accordingly.
Although prepaid phones remain a fraction of the overall mobile phone market, sales of the category grew 13 percent in North America last year, nearly three times faster than traditional cellphone plans, according to Pali Research, an investment advisory firm. For the first time in its history, T-Mobile has been signing up more new prepaid customers than traditional ones. And Sprint Nextel is betting that a new flat-rate prepaid plan will help it wring more value from its struggling Nextel unit.
I think the cell companies could have worked these plans much better when they first started years ago. The demand for this was always out there, but the phone usually had so many restrictions that they quickly lost luster. I used to sell the phones (prepaid and contract) and based on the number of airtime refills I’ve rung up over the years, the majority of the major carriers missed the boat on this market. When Tracfone showed up, the rules changed a lot. They decided to pre-buy airtime from all the major carriers in the U.S. and Canada and were able to sell a prepaid phone that worked just about any place where you could pick up cell service. Initially their cards had to be bought every 60 days or so to keep it going, but then they started to offer a 1 year plan. Refills tended to be difficult to put into the phone. Now when you buy refills online for Tracfone, it auto refills it right on the phone when the purchase is done. They have all sorts of airtime amounts and options. I can still text message and use voicemail just like with other phones.
Before you consider another cell contract, there is one thing I’d like you to consider: mandatory arbitration.
