Prepaid rules across the Atlantic

As much as we love it, the state of prepaid in the U.S. isn’t at all impressive when compared with the rest of the world. Carriers here want nothing more than customers to sign on the dotted line, committing them for two years to the one service (and charging huge early termination fees in order to keep them around). They also lock down handsets to one carrier, making a switch harder. This is true in the prepaid realm as well. Things aren’t the same everywhere else, though, as Stefan from IntoMobile relates.

He relates this story, from Spain, where about half of users are on prepaid:

I remember asking another roommate, on more than one occasion, if the cell phone she had was new. The answer was almost always yes. The bottom line seemed to be that because cell phones were so accessible and the relationship with the carriers so no-strings-attached, there was an incentive to always get a new one. Not being under contract or getting penalized gave these guys the ability to upgrade their phones when they got tired of them (which was quite frequently).

The only problem I see with this is that unsubsidized phones are rather expensive in the U.S. The probably are in Europe, too. So do Europeans just care more about phones than we do in the U.S., and thereby more apt to drop cash on them? I’m not quite sure. I just know that we in the U.S. revel in our cell phone subsidies.

Stefan takes Apple to task for not doing its part to change the paradigm in the U.S. After all, about a quarter of iPhone haven’t been activated on the AT&T network. Clearly, consumers are looking for something better. But I think it’s a bit much to expect one company to step to the plate and try to change everything.

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