• M600@lemmy.world
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    15 days ago

    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
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      15 days ago

      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
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        14 days ago

        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
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      15 days ago

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

    • Psythik@lemmy.world
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      15 days 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.