16th November 2011
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T-Mobile’s Q3 Earnings continued to show that prepaid subscribers are growing and contract subscribers are shrinking. T-Mobile’s prepaid subscribers grew by 312,000, offsetting a loss of 186,000 contract customers, bring a net overall gain of 126,000. Compared to the top two carriers, Verizon and AT&T, this net gain is essentially breakeven.
Prepaid subscribers are of increasing importance to the bottom tier of carriers. Sprint prepaid customers are now 40% of total subscribers while T-Mobile’s make up to 30% (MetroPCS is 100%). Our troubled economy is to blame for some of this growth as prepaid contracts offer more flexibility in payment. Coupled with more inexpensive phones, this will continue to be the good enough solution for most people
In the ROW, prepaid is the norm as is buying your phone without a carrier subsidy. The growth in prepaid in the US suggests consumers are getting used to the idea. This doesn’t mean that high end phones are doomed. Apple is going to do very well selling the best and brightest product. It’s just that there’s now room for a ‘Chevy or Ford truck’ type phone
