Survey says that 20% of Americans are planning to switch to prepaid in the first half of 2011

New Millennium Research Council (NMRC) commissioned a survey [PDF file] of 1,008 Americans during the second week of October and found that an estimated 24.6 million consumers, or 1 in 5 people who currently have a mobile phone on some sort of 1 or 2 year contract, are either planning to or considering switching to prepaid within 6 months in order to save money. Over 52% of the people interviewed said that the primary reason they don’t switch to prepaid is that they would have to pay an early termination fee. The scary statistics come when you look at mobile phone usage, with 39% of people saying they have a “basic, no frills cell phone that you use only or primarily for making phone calls” and a further 28% saying they have “a cell phone that makes calls, but is also designed for a lot of texting”. What about smartphones? About 11% of people have a BlackBerry, 7% have an iPhone, 7% have an Android device, and 4% have something else, probably either Windows Mobile or Symbian.

Sam Simon, Senior Fellow at the NMRC, said: “With millions of recession-weary consumers looking to trim even more fat from their household budgets, 2011 is shaping up to be the Year of the Prepaid Cell Phone Consumer. Even without the need to pinch pennies during the current economic downturn, consumers are clearly fed up with the high prices of contract-based cell phone service and the gouging that goes on with early-termination fees (ETF). We were the first to forecast a big shift to no-contract/prepaid cell phone service by U.S. consumers, but we may have actually underestimated just how quickly this trend would catch on.”

Will America eventually turn into Europe and Asia in terms of how people buy their devices? If everyone is on prepaid, then that also means everyone is paying full price for their handset. That’s just how things work in most parts of the world, and I welcome the other side of the pond finally getting it.

See these two articles for more information on just how bad you guys have it compared to the rest of the world:

OECD: Finns, Swedes and the Dutch have the lowest phone bills; Americans pay up to 484% more

Americans and Canadians have the most expensive phone bills in the world [No surprise, really]

  • For those waiting for their contract to end, I would seriously do the calculations and check whether it isn’t worth your while to get on and pay those termination fees. I know of a couple of friends who worked out that even paying the ETFs, within 3 months, the savings covered the costs and then for the remainder of what would have been contract time, they were saving.
    I originally switched to Tracfone purely due to a bit of a financial crisis (which was a huge saver), but now that I’m back on my feet, would like something that gives me more minutes, and I can honestly see why more people are opting for prepaid with deals like Net10’s unlimited everything plan for $50. Think that’s going to be my next move within prepaid.

  • TechSaver

    Straight Talk uses ATT and verizon networks to power their $45/mo unlimited everything prepaid plan, with no contracts and no credit checks. They also have a $30/mo 1000 min & text plan for those who dont need unlimited everything.

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