Are family plans the next prepaid frontier? posted by Joe on May 17th, 2010 - 7:30 am | Prepaid Services
In a recent article for GigaOm, Colin Gibbs wonders what will happen when prepaid carriers start to carry data-intensive phones. We’ve seen a few prepaid BlackBerry offerings, but as Gibbs notes, even then data intensity might not be as big an issue. On the whole, though, there aren’t many, if any, prepaid phones that measure up to the iPhone and Android offerings that have captured the market. Eventually they’ll hit prepaid, at which point the major carriers will have to figure out what differentiates them. There is one issue, beyond smartphones, that postpaid carriers boast as an advantage, and it’s one that prepaid carriers could adopt.
As I mentioned last week, prepaid could capture the feature phone market. In other words, the data heavy phones could still be in the realm of subsidies and contracts, while the lesser phones are almost strictly relegated to prepaid. There’s one reason that wouldn’t work, though, and that’s the presence of family plans.
A few prepaid carriers currently have family plans in their lineups, but most don’t. That’s not to say that they should have them now — clearly they’re reacting to the demands of the market. They could, however, use family plans as a draw in the future. As we see more and more users sign up for prepaid plans, carriers will have to devise ways to attract even more. Making it easy to get a plan, and phones, for the whole family could be one of those draws.
Family plans are essentially the realm of postpaid right now, even though the contract doesn’t mean as much in that case. For a family with four lines, all of which are feature phones, a postpaid deal might not be that necessary. If prepaid carriers put together a package of phones and plans that could fit a family’s needs, and then make the account easy to manage, then I think they could capture some of that market.
It would have to be a reliable system, though, because almost everyone I know who has a family plan rates reliability as their most important aspect of a wireless carrier. Name brands have an easier time boasting reliability, which means that many family plan customers will stick with them rather than switch to a lesser known prepaid brand, even if the prepaid brand will save them money. If a prepaid carrier can build that reliable platform, I think it would do very well in the current market.