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The Cell Phone Industry Has Gone Topsy-Turvy

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The tide is changing for the mobile phone industry.

BGR reported on a study by Chetan Sharma that a growing number of cell phone users are opting for prepaid options. Contract usage for carriers like AT&T (T), Verizon (VZ), and Sprint (S) are on the decline for the first time in the industry’s history. The study reports that the top seven carriers in the United States lost a combined 52,000 postpaid subscribers. Sprint, once thought of as a dark horse, is currently beating its rivals -- a fact largely based on its prepaid division Virgin Mobile. The Chetan Sharma study reports that the carrier “is the only U.S. operator that has added more than 1 million subscribers every quarter since Q4 2010.”

The prepaid market will undoubtedly continue to grow later this month when Apple’s (AAPL) iPhone will become available to Virgin Mobile and Cricket (LEAP) prepaid users, but be prepared for an initial sticker shock.

Minyanville broke down the costs of the two prepaid providers.

Though the monthly rate offered by Virgin Mobile starts at $30/month, the unsubsidized cost of the phone will be $549 for the iPhone 4 and $649 for the iPhone 4S. Cricket’s single plan is priced at $55/month, with the iPhone 4 being offered $399.99 and the iPhone 4S $499.99.

Though the study reports that the increase in prepaid customers is most likely a result of the bad economy, the stigma once associated with prepaid phones is being replaced by a feeling of freedom, if not relief.

The shackles are coming off, cell phone owners. You now have more options than ever before.

(See also: Save $1,000 on iPhone Charges by Thinking Like 'The Wire' and Verizon, AT&T Screw Over Their Customers Yet Again)
POSITION:  No positions in stocks mentioned.