According to a survey conducted by PwC, there was approximately 30% growth in the use of prepaid phone plans from 2012 to 2013. There is increasing growth in the “prepaid” market of the wireless industry. Why? The answer seems to lie with the Millennials, the generation of individuals who reached adulthood around the turn of the century. Young and tech-savvy, their demands are increasingly shaping the market, and right now they are demanding pay-as-you-go phone plans. The following six reasons help to explain their logic.
- Millennials want to save money
This generation wants a quality service phone plan, but they are disenchanted with the cost-heavy, long-term contracts that have been the norm. It is often far more cost-effective to go with a prepaid plan. Contract plans are often attractive at first glance, because the price of the phone is spread out over the length of the contract and very little is paid up front. Prepaid phone plans generally require that you bring your own phone or purchase a phone when you begin the service. However, Millennials have discovered that in the long run, they pay much more for the contract plan than by paying month to month.
- Millennials want freedom to shop around
Millennials are used to shopping around for the best deal. From online reviews, blog posts, and comments on social media, this generation is accustomed to instant access to the opinions and experiences of other consumers. They have become experts at using this fount of information to sort through the options and find the best deal. What does that mean for long-term phone plans? They are becoming antiquated, as Millennials are simply are not interested in being stuck in a two-year-plan. They want the freedom to shop around and switch carriers if they find a better deal.
- Millennials want flexibility
If this generation has learned anything from their cellphones, it is that technology should be flexible. A serious problem with long-term contracts is that they make the user dependent on the carrier’s coverage area. If they are relocating permanently or just travelling for business or pleasure, Millennials want to have reliable phone service. If the provider does not offer the needed coverage, prepaid phone plans allow the users to hop onto another network for a short duration – preventing any gap in service.
- Millennials know exactly what they want
Prepaid phone plans give users the ability to pick and choose the options that are right for them. The Millennial generation is not happy with a one-size-fits-all phone plan. Pay-as-you go options allow users to decide exactly how much talk time, text messages, and data they need. A prepaid plan might offer the convenience of paying for a certain amount of minutes or data, or paying for one month of unlimited service.
- Millennials do not want to pay overages
In the past, service providers were able to charge exorbitant fees for going over the allotted minutes and texts. These days, most contract plans offer unlimited talk and texting, but are still gouging users when they go over their monthly data limits. Millennials recognize that one of the advantages of prepaid phone service is that it increases freedom and removes the fear of astronomical overage charges. Paying up front means no surprise charges on your bill.
- Millennials do not want hidden fees
In fact, prepaid means no unpleasant surprises, ever! All those little extra fees that are often hidden in contract plans are quickly becoming a thing of the past. Millennials are demanding transparent plans.
As the generation of Millennials makes their combined spending power felt, their influence on businesses continues to grow. It is very likely we will continue to see a rise in flexible, prepaid phone plans.