Two out of three new subscribers are picking prepaid service over postpaid, reports Washington, D.C.-based think tank the New Millennium Research Council (NMRC).
According to the group, new prepaid cell phone subscribers accounted for 65 percent of the 4.2 million net subscribers added by U.S. operators in the fourth quarter of 2009.
The prepaid segment now represents 20 percent of U.S. subscribers, or 54.4 million people, up from 46.3 million people last year.
In addition, the prepaid segment is growing more rapidly than the postpaid segment. Prepaid subscribers grew 17 percent in the fourth quarter of 2009 while the postpaid segment grew just 3 percent in the same period.
The group’s findings confirm year-old trends that 39 percent of U.S. consumers were contemplating cutting back on their cell phones to save money if the recession continued.
“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,” NMRC Project Coordinator Jose Guzman said in the group’s report. “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.”
The NMRC expects the trend toward prepaid service to continue throughout 2010.
The group is described on its Web site as a “project” of Amplify Public Affairs, a Washington, D.C.-based public relations firm whose clients include Sprint, Verizon Wireless and AT&T.
Amplify Public Affairs Chairman Samuel Simon says the firm staffs, manages and finances NMRC but does not conduct research projects through the group on behalf of clients.
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