this post was submitted on 17 Oct 2024
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[–] M600@lemmy.world 3 points 1 month ago (3 children)

Why is prepaid service cheaper? I never understood why plans cost more. You would thing it would be the opposite.

[–] sugar_in_your_tea@sh.itjust.works 7 points 1 month ago* (last edited 1 month ago) (1 children)

Some reasons:

  • prioritized traffic - if towers are congested, carrier customers get priority over prepaid customers
  • name brand recognition - most have heard of Verizon, T-Mobile, or AT&T, few have heard of Tell, Ting, or RedPocket
  • financing - you can get "free" upgrades from bigger carriers, whereas I pay cash w/ my prepaid service
  • features - most big carriers support roaming (sometimes international roaming), whereas those tend to be ala carte w/ prepaid

In short, you get a bit more hassle w/ prepaid, but you get a lot of savings. I pay <$10/month for my service (1GB data, unlimited text, 300 minutes call), and I could get unlimited everything for $25-30 (depending on prepaid carrier). I bought my phone for <$400, whereas cost is less of a concern for big carriers since they often offer financing issues. I hate monthly payments, so I prefer to buy devices in cash and keep my monthly service payments low.

[–] Cort@lemmy.world 4 points 1 month ago (1 children)

Plus the bills are paid up front. No collections department, or write-offs. Plus you get to earn interest if the customer pre pays multiple months or a year in advance.

[–] gray@pawb.social 4 points 1 month ago

Money up front vs people just not paying the bill at the end of the month.

[–] Psythik@lemmy.world 4 points 1 month ago

Because prepaid customers get lower priority on the tower. If I'm in even a moderately crowded area, my connection speeds go to shit and nothing loads.