Prepaid phones gaining ground in mobile market


In yet another sign that money is tight, more people are getting prepaid cellphones instead of the traditional cellphone plans where customers get a bill at the end of the month, according to a New York Times story.

I've had a prepaid cell phone for almost two years, paying 10 cents per minute to talk and 5 cents for a text message through Net10. It's a great deal because I don't pay roaming charges, only pay for the time I use, don't get a surprise bill each month with taxes and various fees, and the minutes rollover if I activate as little as 150 more minutes, or $15 per month.

Prepaid phone sales grew 13% in North America last year, nearly three times faster than traditional cellphone plans, according to Pali Research, an investment advisory firm quoted by the Times.

T-Mobile is signing up more new prepaid customers than traditional ones. Some companies are offering $10 monthly, flat-rate plans that offer unlimited calling, Web browsing and text messaging.

The Times story reports that the savings can be considerable, nearly $1,000 over a year for an Apple iPhone users. An AT&T customer with an iPhone on a traditional plan pays at least $130 a month, excluding taxes and fees, for unlimited calls and Web use. That cost would drop to $50 a month under a plan from MetroPCS.

The story had a great comparison chart of some of the plans, although the Net10 plan I have wasn't on there. That might be because it isn't an unlimited plan, but is 10 cents-a-minute that I prepay each month. If you're looking to save money on a cellphone bill, prepaid cellphones may be the way to go.

Originally published