No-Contract Phones Gaining More Popularity

The most incessantly frustrating cell phone aspect is the obligatory two-year contract and the hefty early termination fee that always goes with it. So it should hardly be unexpected that a new survey of cell phone customers conducted for the New Millennium Research Council (NMRC) shows that almost 25 million Americans are seriously considering switching to no contract phone services the next time they purchase a cell phone.

This is not a new trend. In 2009, the NMRC predicted that a shift in consumer preference from expensive, contract-based services to cheaper, no-contract phones was forthcoming. They were proved correct when, in early 2010, it was reported that for the first time, sales of no-contract phones had surpassed sales of contract-based phones among new purchasers. Since then, consumers have continued to support the no-contract phones market, a sentiment confirmed by the results of the NMRC survey.

The survey has found that almost half of U.S. respondents who are currently using a contract based service are at least “somewhat likely” to switch to a no-contract phone the next time they purchase a cell phone. Even among those who did not classify themselves as being somewhat or very likely to make the switch, there is a resounding acceptance of no-contract phones as a viable alternative to contract-based cells. In fact, less than 20 percent of respondents indicated that they do not ever see themselves switching to a no-contract phone service. This result overwhelmingly points out the growing popularity of no-contract phones; and this popularity is likely to continue to increase in the future.

So why the massive shift in popularity? Why have people become so accepting of no-contract phones? Analysts believe there are a number of primary reasons. First, no-contract phones help to manage expenses because you can only use what you have already paid for. Many consumers have realized that they do not use their phone for many of the expensive services they would pay for on a contract-based service, such as data downloads, picture messaging and video calls. With no-contract phones, they don’t have to pay for these services if they don’t use them, saving hundreds of dollars. Similarly, people who only want a phone for limited or emergency use are also tending to switch to no-contract phones.

The potential of no-contract phones has long been obvious. However, it is only now that this formerly small market is transforming into a global communication phenomenon.