Which User Segments are Most Likely to Switch to Prepaid?

Prepaid wireless has been on a tear of late, growing to 55 million U.S. users and about 17 percent of all U.S. wireless accounts in service. And though prepaid traditionally has been centered on "banking challenged," "low income" or "youth" market segments, that is starting to change as consumers from a wider range of segments seem to be opting for

Often thought of as a "consumer" option, one also has to wonder whether at least some business users might consider switching to prepaid, for at least some employee segments.

That, at least, is what Compass Intelligence thinks could be happening at smaller firms, for example. A recent change that could be driving such interest are new "unlimited" talk and texting plans from firms such as AT&T.

In a recent survey, Compass Intelligence found that a high percentage of respondents indicate plans to give new prepaid devices to one or more employees.

Another segment Compass Intelligence found was interested in prepaid plans are "larger families."  The larger the family, the more mobiles they currently use and the more likely they will replace postpaid wireless devices with prepaid options, Compass Intelligence says.

Users with multiple mobile devices also are more likely to indicate they plan to replace a postpaid wireless account with a prepaid option as compared to other segments.

About 11 percent of the respondents with three or more mobiles are willing to replace one or more of their postpaid mobiles with prepaid, while only three percent of the respondents with only one mobile device indicated plans to do so.

When adding a new device, 22 percent of respondents indicate they will add prepaid mobile.

The apparent relationship between prepaid demand and family size and number of devices is likely the result of U.S. consumers and businesses seeing wireless devices as "nice-to-have" items that are useful for more members of families and employees, along with the ability to limit financial exposure.

One of the advantages of prepaid service is that it can be terminated easily, allowing parents and business managers to quickly cut back on such service if necessary.