Advance Cell Phones: A New Growth Industry

Mobile phones in the market landscape has changed over the past year. The overall mobile phone market continues to grow, the traditional post paid plans, the combined market share is declining. Contract plans are quickly replaced by the cheaper pre-paid mobile phones.

Prepaid vs. Paid Post
Two main types of mobile phone plans prepaid and post paid. With prepaid, you pay for your minutes in advance. Postage is paid, you pay for each minute late. Post paid plans require a credit check and contract as you pay for your minutes after you've used them.

Growth Statistics
Mobile phone market has grown annually since its inception, and the overall market continues to grow. In the United States, more than 80% of the population uses mobile phones. That trend continues to grow, albeit more slowly than in previous years.

Traditional contract phone plans has been a major niche within the mobile phone market, a niche that has grown year after year. However, the growth trend, 2008 began to decline. Since 2008 by 2009 Net additions to subscription customers of all major carriers fell 58 percent. In 2009 post paid subscriber growth has indeed changed, and the market is currently declining.

Meanwhile, prepaid customers is growing. In 2008 About 50 percent of new mobile phone users signed a prepaid cell phone service. The following year, 2009, about 80 percent of the phone subscriber growth came from prepaid plans.

Historically been used for two types of people: young people and people with bad credit, prepaid phone plans. As the traditional post paid plans require a credit check, a lot of people can buy traditional post paid mobile phone. Traditionally, these people have no credit or bad credit is pre-paid market share. One drawback of prepaid plans until recently was that of prepaid cell phone plans were more expensive than post-paid plans.

Prepaid Is now cheaper
However, several years ago, pre-paid plans, prices started to come down. Now is much cheaper than the paid plans prepaid cell phone plans. Many prepaid carriers now even offer unlimited minutes plans that are less expensive than a comparable contract plans to have 500 minutes. Low-cost pre-paid plans and the economic recession are fueling rapid growth in prepaid mobile phone market.

Of course, the major cell phone companies is not happy about it because they do a lot more money to contract plans than they paid in advance. There are three reasons for this. The first is that the payment plans are more expensive than prepaid plans. Traditional contract plans may have more than $ 80 a month, and pre-payment plan with the same minutes can be as cheap as $ 40. Second, not only do cell phone companies make more money contract plans, but they are secure recurring revenue stream by locking their customers with long-term contracts. The third reason for post-paid plans are attractive to the mobile phone companies that they charge excessive rates if you go over your minutes allowance, when 25 or 50 cents a minute. This adds up very quickly, and many people have accidentally run several hundred dollars in a huge mobile phone bills.

Of course, with pre-paid plans, you do not have this issue. Pre-paid plans are now less expensive than a minute, and it is not a contract. Also, if you go through the minutes that you purchase, you can just buy more minutes.

Cell phone plans for the future
Contract cell phone plans and continue to be popular with consumers, though. The main reason is that the phones that they offer a cheaper, at least in front. Many consumers continue to choose this plan, because they can not afford a $ 600 phone. Carriers subsidize the price of the phone when customers sign a two-year contract. In contrast, pre-paid phones are more expensive, because none of the cost is subsidized. Users must pay full price for prepaid phones. What should consumers do not realize that the carriers could subsidize the cost of the phone, because they know more than that, they have a two year contract price of the phone (and many more.)

Prepayment plans to continue to gain market share, though. They just make more sense financially to consumers. The economy was bad years ago, and not see the end. Reduces the total cost of prepaid cell phone plans to continue to increase its popularity and more consumers choose to advance plans for the traditional post paid contract plans.


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