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78 Percent of Wireless Minutes Paid For Go Unused, According to New Industry Survey |
A recent analysis of the wireless industry by TNS Telecoms, a leading
telecom market information company, uncovered that a whopping 78 percent of
the wireless minutes paid for by consumers go unused on a monthly basis. The
survey also revealed that the average wireless household pays $17.75 more
each month than the cost of their monthly rate plan. Factoring in taxes,
fees and additional charges, consumers may be paying five times the
advertised rate per minute of their contracted rate plan.
With Taxes, Fees and Extra Charges, Consumers May be Paying Five Times the
Advertised Contracted Rate per Minute
MIAMI, Aug. 5 2004
"It's not surprising that overall consumer spending on telecom services
continues to grow, with wireless service representing a strong portion of that
growth," said Charles White of TNS Telecoms. "What may be a surprise to
consumers is that, on average, they only use 22% of the wireless minutes they
have available."
"The growth of the prepaid wireless industry clearly indicates that a
growing number of wireless phone users are looking for ways to hang up on
wireless phone bills," said FJ Pollak, president and CEO of TracFone Wireless,
the largest prepaid wireless service provider in the U.S. "Our prepaid
wireless service provides consumers with the luxury of knowing upfront the
exact cost-per-minute, eliminating unwanted surprises, such as big monthly
bills."
According to the Yankee Group, the prepaid industry continues to show
strong growth, from more than 18 million subscribers by the end of this year
to nearly 25 million during the next three years. New prepaid users could
generate $6.3 billion in additional revenue to the total wireless market
through 2006.
"Our subscriber growth rate, quarter over quarter, is a clear indication
that more and more Americans are seeking greater control of their wireless
expenses," added Pollak. "Prepaid offerings can actually be less expensive
than many contracted, postpaid plans when you consider the real cost of these
plans, especially if you are a lower-volume user. With our prepaid wireless
service, there are no contracts, credit checks, monthly fees, security
deposits, activation or deactivation charges, or age restrictions. It's a win-
win situation for the consumer."
Other key findings from the analysis found:
* Consumers who commit to monthly plans of $20 or less are paying 52
percent more when they get billed.
* The average wireless household has 1,831 wireless minutes available to
them but uses only 452.
* Approximately 1,400 wireless minutes go unused each month by the average
wireless household.
After attending several wireless user focus group studies recently, Pollak
observed that many consumers had no real idea what they were paying for
wireless service each month and that many were lured into monthly plans
because of "free nights and weekends" or "free in-network calling" promotions.
"What the consumer doesn't realize is that these features are not really
free -- they are paying for them when they write their monthly check to their
carrier for $40, $50, $100 or more a month," said Pollak. "Based on TNS'
recent data, too many Americans are paying for more minutes than they use.
With a prepaid wireless service, no matter the day or time, you will only pay
for the minutes used."
Billing Complaints Not New To The Industry
According to PlanetFeedback.com, the nation's leading online consumer
feedback service, more than 80 percent of customer comments received in the
wireless category are complaints.
"PlanetFeedback.com monitors the customer satisfaction parameters of
hundreds of companies and brands, and TracFone Wireless consistently ranks in
the highest tier of customer satisfaction, well exceeding the other major
wireless players," said Pete Blackshaw, chief marketing and client
satisfaction officer of Intelliseek Inc., which owns the PlanetFeedback.com
web site.
Pollak attributes TracFone Wireless' high customer rating on
PlanetFeedback.com to the fact that TracFone's prepaid wireless service comes
with no bills, no credit checks, no age restrictions and no contracts. In
addition, TracFone allows the customer to control their costs by giving them
the freedom to purchase and redeem airtime on an as-needed basis without
contracts and commitments.
About the Research
TNS Telecoms continuously tracks the telecommunications marketplace
through its ReQuest(R) consumer survey of over 120,000 households and Bill
Harvesting(R) from over 32,000 U.S. households annually. Bill Harvesting(R)
respondents provide their complete set of telecommunications bills,
promotional bill inserts and telecom direct mail communications. In the
business market, TNS Telecoms' BusinessWave(R) research gathers telecom
behavior information from small, medium and large businesses across the U.S.
TNS Telecoms syndicated information is the leading source of telecom industry
market tracking data. The results of this analysis are from the 3rd Quarter
of 2003.