Economy Slows, PrePaid Mobile Grows

Last week, Stacey came up with five reasons to consider prepaid mobile phone calling plans, especially in these tough economic times. Some wondered why we wrote about that topic, and to them we say: look at the recent trends. There is growing body of evidence that the demand for wireless services is dipping, especially in the growth of post-paid subscriptions, a trend that was first evidenced in the 3Q 2008 and has continued since then.

Service Providers New Pre-Paid Adds
MetroPCS 249,000
Leap Wireless 155,000
T-Mobile 377,000
Tracfone 341,000
Verizon Wireless 90,000

On the flip side, there is a growing demand for unlimited prepaid services, and that is helping budget service providers like Tracfone (s AMX), Leap (s LEAP) and Metro PCS (s PCS). A UBS report suggests that they are in fact beating down the national phone companies. Data collected by UBS research group shows that there are 45 million prepaid subscribers in the U.S. representing 17 percent of total customers. In the third quarter of 2008, 870,000 new pre-paid subscribers were added to the ranks, with national carriers (Sprint (s S) & AT&T (s T) were big losers) adding only about 120,000. If you look at the table, it is evident that some of the smaller players are doing relatively well as a large part of the population looks to saving money on everything — from heating bills to wireless phones to broadband connections.