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Verizon, AT&T and others still struggle to attract new subscribers

The economy is finally seeing recovery after quarters of disappointing figures, but AT&T and Verizon Wireless are still finding it difficult to woo new wireless subscribers.

Verizon signed 423,000 customers to postpaid contracts, while AT&T added 512,000 new subscribers.  AT&T’s new subscriber base saw a 43% decline compared to one year ago, while Verizon's 423,000 tally was a 55% drop compared to 2009.

Rather than latch on to costly two-year phone contracts, many wireless customers are now choosing prepaid wireless phones. The use of a prepaid plan allows owners to pay just for the minutes and data they use, which is especially helpful as many Americans continue to closely watch their budgets.

Unfortunately for wireless carriers, prepaid phone plans offer less profit for the host companies -- which is exactly why all four carriers offer phone specials, buy-one-get-one promotions, and other incentives to get customers hooked into long-term contracts.

AT&T is expected to again add more prepaid phone owners than postpaid customers in the next quarter -- a troubling trend for the carrier that has exclusive rights to the Apple iPhone.  Verizon continues to seek out the iPhone, though AT&T and Apple still reportedly have a strong working relationship. However, a possible Verizon-Apple partnership will be a significant victory for Verizon.

Verizon has used the Google Android mobile OS for several major smartphones, including the Motorola Droid and upcoming Droid Incredible, though the company understands the consumer market is rather fickle at the moment.

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prepaid - only for those that dont use their phone
By vapore0n on 4/28/2010 8:27:36 AM , Rating: 3
I just went to the ATT site and the plans really dont look that good if you are planning on actually using your phone.

A prepaid plan worth 39.99 includes a lot less minutes than a 2 yr contract plan of same price. Of course you are not bound to a contract, but are bound to att and the crappy prepaid phones.

The cheapest pay as you go plan of 3$ per day you use your phone sounds interesting, but only if you use the phone 5 days a month.

By michal1980 on 4/28/2010 8:47:47 AM , Rating: 4
Thats because ATT's plans suck.

Its true if your a heavy phone user Post Paid/contract is the way to go.

Me and my wife however each use ~1000 mins/year. Currently we use t-moblie pre-paid. I get 2 refill cars a year at an msrp cost of 100 bucks (and I can always time it to get them at least 10% off, if not more).

So our yearly phone plan cost at 200 bucks. or 17 dollars a month. can't beat that for our use. Yes I would like a nice data phone with internet, and I would use that. But if I can save a few hundred dollars a year and use that for a short vacation, that provides me far great value.

Plus I dont 'pay' any extra taxes/fees on top of my plan. unlike those 50 dollar a month plans that turn into 70 dollars a month.

By barjebus on 4/28/2010 12:51:28 PM , Rating: 2
I'm in Canada and am eternally frustrated by the fact that in the area I live, our GSM provider requires you to top up monthly. I have a sim card embedded in a GSM receiver that is wired to a remote car starter. I only use this device in the winter, and it never actually consumes minutes...yet I must top up my account with 10$ worth of credit every month even though I never use it.

The device itself notices that a call is incoming to it and activates, so it never really completes the connection and never consumes and minutes.

By Hieyeck on 4/28/2010 4:01:42 PM , Rating: 2
Um... If you're talking about Rogers, you need to look more carefully. I buy a $100 top up (you'll have to go to a rogers store and they print it out on a receipt) and it lasts for a year. that's... $8.33/month? Conversely, you can sign up for auto-renew and then cancel every winter...

By mcnabney on 4/28/2010 9:06:45 AM , Rating: 3
Wireless companies make plenty of money off of prepaid. The reason they want customers under contract is that prepaid customers drop service/change carriers at a much much higher rate. Would you really want to spend all of that money attracting a customer and subsidizing a device for a customer that will deactivate in five months when you could be going after customers that will be with you for at least the term of the contract?

By michal1980 on 4/28/2010 11:26:46 AM , Rating: 2
The pre-paid phones are general very basic. I doubt they are subsidized much at all.

They want contract people because on average your contract person is paying ~$3/mintue

By iFX on 4/28/2010 9:16:04 AM , Rating: 2
Straight Talk

$45 month, all fees and taxes included.

Unlimited Minutes
Unlimited Text/SMS
Unlimited Data

I use my phone a LOT, sonny boy.

By CSprepaidUser on 4/28/2010 9:47:50 AM , Rating: 3
Actually, it's just that AT&T's prepaid plans are not all that great. They offer the 10c per minute call rate I get at NET10 ONLY if you pay their 'daily access fee' of $1. Come to think of it if you use your AT&T gophone on that plan say, once a day for 20 days of the month it would be ridiculously expensive.
Like I said, with NET10 I pay 10c per minute WITHOUT any daily fee. Granted I'm not a heavy user, so my monthly expense is usually $30 spread over two months.
If you're a heavy user you can choose between the many unlimited prepaid plans out there...

Unless you base your choice of cell provider on the device you get, I don't think there's a single contract plan out there that can't be beaten by a prepaid one.

By TheRequiem on 4/28/2010 10:34:49 AM , Rating: 2
Just go with SPRINT, they have Boost mobile and virgin mobile and the cheapest rates.... Also, there network is better then AT&T's prepaid network...

By puplan on 4/28/2010 8:54:24 PM , Rating: 2
I second that. Boost prepaid lets me have a cell phone for $3.33 a month. There is enough minutes for emergency use, synchronizing kids pickup, shopping list addendum, etc.

By Denigrate on 4/28/2010 12:04:29 PM , Rating: 2
Been using T-Mobile's prepaid plan for a couple years now and have had zero issues with it. My wife and I both have one and I buy my wife a $100 refill with 1,000 minutes about once a year and I buy one about every six months. We have these phones for our convienence and basically don't give out the number. We use Ooma at home so basically use the cells on trips and for in case of emergency calls like if the power goes out. I'll admit, the most minutes probably get used when one of us it at the store and we forgot to get an item on the list.

By marvdmartian on 4/28/2010 11:46:29 AM , Rating: 2
Well, yeah, but not all of us are addicted to our phones, ya know?

I bought my GoPhone a few years ago, when I was between addresses and didn't want to be out of touch. I kept it for those times when I'm away from home, for the same reason (and because making credit card phone calls puts even cell phone plan costs to shame!).

AT&T offered me 2 plans when I bought my phone:
1. 25 cents a minute, no daily charge
2. 10 cents a minute, $1 daily charge for any day I use the phone.
I went with #2, because most of the time, if I'm going to use the phone, I'll use it for longer than 6 minutes (pretty much the break even point between the 2 plans).

But I use my phone for 2 things, to make phone calls, and to receive phone calls. I don't do texting, I don't need a data plan, I don't require a way for people to send me pictures, and I don't need to take pictures with my phone. I have other technology that does all the things I don't need my phone to do, and they do them much better than a phone can.

And I probably don't go through more than $125/year using my prepaid phone, and that's during a heavy use year. So yeah, I don't use my phone much, but I only pay around $10 a month. Beats the hell out of any post-paid plan, and for every $100 I spend, they give me $10 worth as a bonus. Oh yeah, and I'm still using the same $15 initial cost phone after 3 years.

Works for me!

By wifiwolf on 4/28/2010 12:52:44 PM , Rating: 2
I just wonder what kind of management problems US is facing.
Here prepaid is much more used than contracts.
I've got a prepaid plan in which I'm only forced to pay 10€ a month and have:
Free calls (GSM), video calls (3G), and text to everyone that has the same plan as I do in the whole carrier.
Free mobile live messenger.
And 0.20€/min to other destinations.

Doing maths - 50 additional minutes a month for every other people I should need to talk to.
Actually I never needed that much since I almost always only need to talk to my closest ones and they all have the same plan as I do - so we talk as much as we want and for 0€. I'm stockpiling credit should sometime in the future I need it ;)

By Xaussie on 4/28/2010 8:04:25 PM , Rating: 2
I found AT&T were the cheapest. $100 prepaid which lasts one year before expiring, so we end up paying about $8 a month per phone compared to $70 a month with the contract with two phones. That's a saving of $54 a month for us, or over 70%.

Switching was easy too, kept the same phones and the same SIM modules and just called them to switch it over. We had to pay about $200 in cancellation fees on the two year contract but with about 10 months left on the contract it didn't make sense to let it play out.

Of course we don't use the phones for chatting or surfing the web, just to the point information calls. My Blackberry gets Wi-Fi just about everywhere too so I don't need a data plan (don't forget to ask them to switch off data access).

"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson

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