Prepaid Wireless Review

Subscriber surveys gauge satisfaction with prepaid wireless

Prepaid wireless is an alternative to a traditional monthly cell phone plan (covered in our report on cell phone plans). Prepaid cell phones (also called pay-as-you-go) are a good option for people who don't use cell phones that often or who need a cell phone only for emergency situations. Regular cell phone service almost always involves a long-term contract (usually one or two years), but prepaid wireless plans require no commitment. Pay-as-you-go cell phones are a good way to control cellular costs for teenagers, those on a fixed income or people new to cell phones. Finally, a prepaid cell phone might be the only option for those with damaged credit ratings who might not otherwise qualify for a monthly cell phone plan.

Large surveys conducted by J.D. Power and Associates and PC Magazine form the backbone of our report. Both reviews poll thousands of households on overall satisfaction with their wireless carriers and are the best way to gauge overall network coverage, call quality and customer service. J.D. Power surveyed more than 3,300 prepaid wireless users. PC Magazine polled nearly 20,000 subscribers on both regular and prepaid wireless service. Consumer Reports also conducted a large survey, polling 47,000 subscribers, but their research isn't specifically geared to prepaid cellular, making it somewhat less useful.

In addition to these large surveys, we found some other helpful articles on choosing prepaid wireless. CNet.com, ConsumerAffairs.com, Ehow.com and Suite101.com have thorough buyer's guides, plus some reviews of the phones themselves. PrepaidReviews.com has lots of detailed information on costs and features, as well as user reviews. About.com has a prepaid plan finder geared toward identifying the cheapest plan based on expected usage, and it has an article comparing prepaid and monthly cell phone plans. (Note: ConsumerSearch is owned by About.com, but the two don't share an editorial affiliation.)

When choosing a prepaid cell phone plan, reviews say the network is the most important factor, followed by pricing and flexibility. Not all carriers, however, operate their own network of cell towers. Unlike the major carriers (such as Verizon Wireless, Sprint, AT&T and T-Mobile), Virgin Mobile and TracFone are MVNOs (Mobile Virtual Network Operator). MVNOs buy large batches of discounted minutes from the traditional wireless carriers, piggybacking on their national networks. Virgin Mobile leases network access from Sprint, and in owner surveys, Sprint's call quality falls behind T-Mobile and Verizon in every part of the country. However, Virgin Mobile gets mostly positive feedback from consumers nonetheless. The same prevails with TracFone, which ranks highest for call quality in surveys even though it leases from one of the lowest-rated carriers -- AT&T. In general, however, recent surveys note that call quality and pricing among all carriers have improved considerably since 2006. Boost Mobile is owned by Sprint/Nextel and operates nationwide.

That said, we found excellent reviews for Virgin Mobile prepaid wireless. Reports say that it offers a good selection of inexpensive phones, a wide range of low-cost calling plans and no roaming charges. Virgin Mobile generally has less expensive phones than T-Mobile, and its calling plans are less expensive than Verizon Wireless or T-Mobile, making it good for people who make lots of calls. Those factors may ultimately make Virgin Mobile a better choice for those more interested in low costs than call quality. In the latest survey at PC Magazine, Virgin Mobile is the highest- rated prepaid wireless carrier.

Cost is increasingly becoming a factor in reviews. This year, Verizon dropped from first to fourth place in PC Magazine's survey, and while it was the top scoring service with J.D. Power in 2007, it tied for last place in 2008. The drop is attributed to Verizon's high costs for its prepaid wireless service compared with other carriers.

If you are trying to decide between a regular monthly cell phone service and a pay-as-you-go plan, you need to do some careful math, and reviews say prepaid wireless may end up costing more than a monthly plan if you don't watch your usage. Experts say that choosing the most cost-effective pay-as-you-go plan means estimating your minute usage, analyzing the degree to which you will travel out of the coverage area (because roaming may cost extra), estimating the amount of text messaging and other extras you will use, and understanding how the plan charges for its various features. Finally, phones with prepaid plans sometimes cost more, because companies tend to subsidize phones for monthly service but not for prepaid cell phone plans.

Still, for a lot of people, the benefits of prepaid wireless can outweigh the downsides. There's no monthly bill, so it's easier to control costs. Taxes and fees are usually included in the price of prepaid wireless plans, so there are no surprises. No one will check your credit, and if you don't want to continue with your prepaid wireless plan, you simply stop buying minutes.