Summary
Wireless carriers will price post-paid plans to retain customers and avoid churn.
Analysis
While possible that some people may switch from post-paid to prepaid plans as a means of saving money due to additional fees for the former, it is not likely that there will be a big shift. The rationale is that the wireless carriers are getting smarter about how to price to consumers so that its more of a hassle to switch to prepaid than it’s worth.
It is much more likely that there will be a big shift from wireline to wireless with more family plans and package deals for consumers to make this shift. This is a big concern for ATT and Verizon wireline business. It could be a significant benefit, however, for the likes of T-Mobile USA and Leap Wireless who could realize a net benefit as they do not have legacy wireline operations. It would be wise for wireless carrier divisions of tier-one carriers to focus on customer acquisition that includes even cannibalization of their own wireline customers as part of an overall focus on wireless. Properly packaged plans would make this swing to wireless attractive for post-paid plans for most families and heavy single-users, avoiding any concern over a mass exodus to prepaid.
