Report: Prepaid wireless picking off two-thirds of new subs

Prepaid wireless subscriber growth remains strong amid the economic recession, according to the New Millennium Research Council, which cited data from both Ovum/Datamonitor and IDG showing that nearly two-thirds of U.S. net subscriber additions in the fourth quarter were prepaid.

Prepaid carriers enjoyed strong growth last year as consumers looked to keep their mobile phone service but cut back on the monthly cost. The prepaid wireless market grew 17 percent year-over-year in the fourth quarter, according to the think tank, compared with 3 percent growth for the postpaid market. The quarter marked the first time new prepaid wireless subscribers outnumbered postpaid ones.

NMRC said the fourth quarter results confirm predictions it made last year that "a recession-related shift in attitudes and purchasing habits is already underway." At the time, NMRC released a survey of more than 2,000 Americans conducted by Opinion Research Corporation, and found that 39 percent were contemplating cutting back on their cell phone expenses to save money if the recession continued.

Though Americans are favoring prepaid, many of the nation's prepaid wireless carriers are caught up in cut-throat competition. Prepaid players Leap Wireless and MetroPCS did manage to add new subscribers in the fourth quarter, but not as many as in the fourth quarter of 2008--likely due to advances by Sprint Nextel's Boost Mobile and TracFone's Straight Talk. The latest competitive volley? Last week, Leap expanded its calling area to all 50 states and Puerto Rico, and lowered its unlimited calling option to just $30 per month.

For more:
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