Prepaid Making Its Presence Felt

This could be the year of prepaid, for better or worse. Prepaid pricing plans are having a significant impact on earnings of both large and small telcos throughout the United States.

Looking at this week’s earnings announcements, it’s clear that competition in the prepaid market is providing a challenge for these businesses. Prices have dropped dramatically in an attempt to draw more subscribers. But the large number of plans available now seem to be saturating the market.

Many of the prepaid-first-oriented companies have started to see dramatic drop-offs in the number of subs they’re attracting. One example is MetroPCS, which attracted only about 200,000 new customers in Q2; in Q1, the company added almost 700,000.