Report: More prepaid customers moving to monthly plans

Nearly half of all prepaid subscribers are now on monthly service plans as opposed to pay-as-you-go plans, a marked increase from just three years ago, according to a new report from J.D. Power and Associates.

The study found that 49 percent of prepaid customers are now on monthly plans, compared with less than 30 percent in 2008--an increase of more than 50 percent. That stat is one of the nuggets in the research firm's latest U.S. Wireless Non-Contract Customer Satisfaction Index Study.

J.D. Power said the growing popularity of monthly plans for prepaid subscribers is due to a number of factors, including cost savings and different service offerings as well as improved overall satisfaction due to positive recommendations from existing customers. According to the report, overall satisfaction among monthly service plan customers is comparable to that of pay-as-you-go customers.

Prepaid received a major boost last year from flat-rate carriers Leap Wireless (NASDAQ:LEAP) and MetroPCS (NASDAQ:PCS), which both launched all-inclusive pricing plans. Also, Sprint Nextel (NYSE:S) unveiled a multi-brand prepaid wireless strategy that includes Boost Mobile, Virgin Mobile and other brands. And prepaid MVNO TracFone continues to add customers; the company netted a whopping 1.1 million new subscribers in the fourth quarter of 2010, finishing the period with a total of 17.7 million subscribers.

The J.D. Power study said pay-as-you-go customers spend an average of $37 for each airtime purchase in 2011, an increase of $2 from 2010. The report also noted that monthly non-contract customers spend an average of $32 less per month than customers with contracts. Monthly non-contract customers spend $60 per month, compared with an average monthly service cost of $92 for postpaid subscribers.

For more:
- see this release

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