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Will VoIP spell the end of prepaid?

We’ve been hearing a lot about the growth of prepaid wireless lately. Whether it’s T-Mobile adding more prepaid customers than postpaid or MetroPCS adding hordes of subscribers, it seems to be at the forefront of the cellular conversation. How long will it stay there? Some think it’s here to stay — that customers will in the long run prefer not to have a contract. Others, though, think emerging technologies, like mobile Voice over Internet Protocol (VoIP), will marginalize prepaid service.

VoIP, as we know, can provide low-cost or even no-cost calling. This is going to attract many customers, and the analysis’s author believe that it will be at the expense of prepaid. As he says:

within 18-30 months the pressure will be on carriers to position “carrier voice” as a premium convenience “dialable” service as compared to free VoIP services. As this evolution begins to take hold, prepaid services will begin to look less attractive versus a low-cost post-paid plan with data.

Under that scenario, prepaid would return to being a haven for the credit-challenged. While it’s almost impossible to accurately predict how VoIP will change wireless, it’s safe to say that prepaid will still have its niche. After all, as the AP notes, prepaid is growing extraordinarily. In fact, we should see more prepaid customers added this year than postpaid customers.