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My two-year cell phone contract will be expiring in a few months. From a savings perspective, is it better to renew my contract or use a pre-paid plan? Lynette – NY, NY

If you’ve been reading the technology section of almost any national paper or any of the popular tech blogs, you’ve probably noticed a lot of stories regarding the cellular phone industry. The reason for this is two-fold. First, T-Mobile USA finally added their numbers to the first quarter reports issued by other major carriers last Thursday and second, the Association for the International Wireless Communications, also known as the CTIA, just concluded their annual trade show in New Orleans. The big news on both fronts is that across the industry a combined 52,000 subscribers left contract-based plans in the first quarter while roughly two million subscribers opted for new no-contract or “pre-paid” plans. A major reason for this is likely that contract-based plans have begun to lose their appeal as companies like AT&T and Verizon have phased out unlimited data plans for new customers.

In an article by the New York Times, AT&T CEO Randall Stephenson is quoted as saying, “My only regret is was how we introduced pricing in the beginning, because how did we introduce pricing? Thirty dollars and you get all you can eat.”


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