The Price of Airtime

Peter Howe of the Boston Globe weighs in on how wireless carriers are rethinking the pricing structure of their services, in particular moving from post-paid to pre-paid models. The motivation, it appears, is to further their market penetration:
...to wireless companies, prepaid services -- whose subscriber numbers in the United States have been growing at an average 18 percent annually in recent years -- look like the main way they will reach the roughly 40 percent of Americans who have yet to get a cellphone. Non-cellphone owners generally have substantially lower incomes than current subscribers and include millions of young people whose phones would be paid for by parents. In both cases, prepaid plans offer an easier way to stay on a fixed budget for wireless.
''What we're learning as an industry is that it's also about choice and control," said Judy Cavalieri, vice president for alternate payment products with Cingular. ''They can get the freedom and flexibility of no contract and no credit check."
My guess is that this strategy will be somewhat but not totally successful. It will surely bring cell phone service within reach of that part of the market that wants in but has been priced out. It will have little effect, however, in reaching that segment that simply does not want to be reached, literally and figuratively by cell phones, that segment that wants to remain out of range. For them, the greatest amount of choice and control comes is that inherent in not having a cell phone at all.
