From Accessory to Necessity: The Prepaid Phone Revolution

The usage of prepaid mobile phones is more prevalent than it was ten years ago. If you were to throw a small rock into a crowded street, chances are you would hit someone carrying a prepaid phone. A long time ago, there was a time when prepaid phones were a luxury exclusively for the wealthy. Now, even the lower income groups can afford prepaid phones now.

Not more than ten years ago, the people who were purchasing prepaid phones were mainly buying for business reasons. At present, prepaid phones are made for the average consumer, with more and more phones with features that appeal to the mass consumer. The amount of money needed to own a prepaid phone is relatively low, and the handsets that utilize the prepaid service are slightly less expensive than normal mobile phones.

The main draw of prepaid phones was the convenience that it provided. If you find yourself in need of a mobile phone at any point of time and find yourself without access to your own, a prepaid phone can be purchased and used immediately. In comparison, setting up a conventional mobile phone line would require time for processing, which you might not have.

Businesses value prepaid phones because they can be picked up and used immediately anytime and anywhere. It allows business people to take advantage as and when they come, without the hassle of having to set up communication lines wherever they go. However, as more and more of the rich began to pick up prepaid phones, prepaid service providers began to see a market for the mass consumer.

The standard prepaid phone diversified into several different kinds of prepaid phones, catered to the needs of a person running a business startup, to a member of high society. It became not only a communication tool, but signified your position on the social ladder.

The hoi polloi suddenly could access the prepaid phones because of its new affordability, and prepaid phones flew off the shelves. This new demand for prepaid phones increased the competitive pressure between traditional mobile service companies and prepaid service providers. They began marketing campaigns which sought to undermine the other, which has not ended up till to the present day. It was text messaging that tipped the scales in the favor of the prepaid service providers.

Text messaging caught on amongst students who found it a convenient substitute for calling. Prepaid phones made text messaging cheaper than calling, and thus gave it an advantage over traditional mobile service providers. Adam Smith's invisible hand worked in the favor of prepaid service providers, increasing demand for prepaid phones because of its cheaper messaging rates.