More Americans ditching contracts as prepaid wireless surges

Wireless Contracts Decline

More and more wireless users are opting out of two-year service agreements and switching to prepaid. New data released by Chetan Sharma Consulting shows that American wireless carriers as a whole actually lost postpaid subscribers for the first time, as the top seven carriers in the United States lost a combined 52,000 postpaid subscribers. The drop in postpaid subscriptions has coincided with a surge in pay-as-you-go prepaid wireless subscriptions, which have risen 15% year-over-year while postpaid subscriptions have risen just 1%. The biggest beneficiary of this trend has been Sprint, which has long promoted its prepaid options as a cheaper alternative for cash-strapped consumers. Chetan Sharma notes that Sprint “is the only US operator that has added more than 1 million subs every quarter since Q4 2010.” Overall, the firm recognizes that the shift toward prepaid contracts may have more to do with the bad economy of the past four years than with genuine consumer preference and notes that “it is possible that the newly minted prepaid subs might return to postpaid subscriptions.” With the prepaid iPhone coming to Virgin Mobile and Cricket, it seems that smartphone users will have even more reasons to switch to prepaid in the near future.

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