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PrePay to Represent a Quarter of USA Cell Phone Accounts by Year-End

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Prepay accounts will account for a quarter of USA accounts by the end of this year, according to the New Millennium Research Council (NMRC).

According to new data released by the NMRC think tank, about three out of five new wireless subscriptions in 2010 were for prepaid cell phone service -- a margin of more than eight million new prepaid subscriptions versus just under new 4.8 million postpaid subscriptions.

While traditional prepaid service subscriptions lost ground from the fourth quarter of 2009 to the fourth quarter of 2010, unlimited prepaid posted strong gains with 7.4 million new subscribers, up 45 percent over that one-year period. Based on current growth trends, the total non-wholesale wireless market in the U.S. will reach about 290 million by the end of calendar year 2011. For the first time, non-contract prepaid subscriptions will account for roughly 25 percent of the total wireless picture, moving the U.S. more in line with wider use of prepaid in other nations.

Sam Simon, senior fellow, New Millennium Research Council, said: "NMRC was 100 percent on the money in forecasting that 2010 would be the year of prepaid wireless service. It now looks like 2011 will be an even bigger year for no-contract wireless as more and more consumers realize the extent to which they can save hundreds of dollars each year with unlimited prepaid service while also avoiding the needless entanglements of restrictive contract-based cell phone service. This penny pinching will go on even as others are attracted to prepaid by unlimited plans and for connected devices."

Telecommunications analyst Mark Lowenstein, managing director, Mobile Ecosystem, said: "Prepaid services continue to become more mainstream, as attractive devices such as smartphones are offered by the leading prepaid operators. Also, we are seeing the market for additional connected devices such as iPads becoming a key part of prepaid subscriber growth."

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