Edgar Cervantes / Android Authority
Most countries rely heavily on prepaid services as opposed to postpaid services, but the United States has long been an exception. That balance is slowly changing in the US as prepaid adoption is rising while postpaid growth has stalled or even slipped in some cases. The main driver is customer frustration with steady price escalations, including fee hikes, smaller autopay discounts, and direct plan increases. For example, Verizon recently cut its myPlan autopay discount from ten dollars to five dollars, and all three major carriers have raised their infrastructure fees. T-Mobile also stopped including taxes and fees in its advertised pricing.
I have argued before that prepaid is now the better choice for many consumers. The real questions are what caused this shift, whether it could have been avoided, and how worried the big three should be about prepaid competitors.
Should the big 3 worry about the rise of prepaid? 2 votes Yes, postpaid's days on top are numbered. 50 % No, they have prepaid brands of their own so it won't matter. 50 % No, postpaid will still be a big player for a long time. 0 % Other (Let us know in coments). 0 %
What’s really behind postpaid price hikes?
Joe Maring / Android Authority
Price increases have become more common over the last few years, but several factors are at play, with inflation at the top of the list. As much as we complain about how expensive plans have become, we often forget that the value of a dollar does not stay constant.
Back in 2018, a single-line Verizon Mix and Match plan was priced at around $75 to $95 a month. When adjusted for inflation, that is about $97 to $123 today. In contrast, Verizon now charges $65 to $90 a month. Even T-Mobile’s cheapest plans started at $25 a month in 2020 for four lines, which would be around $31 today. T-Mobile still offers a basic four-line package for $25 per line.
Inflation and rising costs have certainly been one factor in price increases and value decline.
On paper, pricing does not look dramatically different. However, the cracks start to show once you look closer. Hidden costs, such as ever-increasing telco recovery fees, are not reflected in the advertised price. It is also worth noting that T-Mobile used to include taxes and fees, which would likely save you at least $10 to $15 a month.
... continue reading