Why No-Contract Wireless Is on the Rise

Much of the subscriber growth reported by wireless providers comes from increasing numbers of prepaid, no-contract customers

By Paul Kapustka, PC World |  Mobile & Wireless, 3g, wifi

Meanwhile, as a result of heightened competition among cellular device providers, better handsets are appearing on prepaid providers' shelves, contributing to what one provider has called "kind of a perfect storm" of opportunity meeting need. The upshot: Prepaid providers can now offer devices like the BlackBerry Curve 8330 smartphone, which comes with app support, e-mail support, and a full QWERTY keyboard, among a bevy of other features.

Sprint Nextel's Boost Mobile brand sells the Curve for $149, and can combine it with a $60 per month plan that permits unlimited text, Web, e-mail, national calling and other extras, putting the Boost Mobile Curve into competition against the top carriers' higher-priced devices and postpaid plans.

Dallas-based MetroPCS Communications, which operates in select markets across the United States, has ridden the wave of prepaid popularity, adding nearly 1 million new customers over the first six months of 2010 while significantly reducing customer "churn," the term used to describe users who discontinue service. "We're getting close to postpaid [provider] churn numbers, which means our message of being affordable and predictable is letting us enjoy a lot of success," says Thomas Keys, MetroPCS's chief operating officer.

According to Keys, the ability of a smaller provider like MetroPCS to move a significant quantity of handsets wasn't lost on the device manufacturers; and they, in turn, helped MetroPCS beef up its device offerings. "We now have 18 to 20 different [phones] in our lineup, with smartphones and [BlackBerrys] right now, and Android devices due out later this year," Keys says. As the economic downturn continues in most parts of the country, and as more potential customers come to the end of their previous postpaid contracts, prepaid providers will continue to reap benefits, Keys predicts.

"Every month, more of those contracts expire and it's a chance for more people to take a look at [prepaid]," Keys says. "They're going to see a MetroPCS that is a lot different than the company they might have heard about in 2005 or 2006."

On Tuesday MetroPCS introduced the first U.S. Long Term Evolution (LTE) 4G services, with a $55 prepaid plan and an LTE feature (that is, nonsmart) phone--the Samsung Craft. The Craft will sell for $299 after rebate, with a $55 unlimited Web, text, and voice plan that targets MetroPCS's cost-aware core customers.

Walmart Shoppers, We Have a Phone for You


Originally published on PC World |  Click here to read the original story.
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