Postpaid subscribers spend more than prepaid ones

Posted by on Aug 9, 2008 in Consumer habits | 3 comments

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My partner sent me this interesting article from Yugatech, saying that Globe’s quarterly report shows that postpaid subscribers spend 7 times more than prepaid subscribers. Here’s a quote from that article:

A recent press release from Globe Telecom indicated that their average revenue per Postpaid subscriber is Php1,492 for the 2nd quarter of 2008. On the other hand, average revenue from Globe Prepaid subscribers is just Php206. TM subscribers even spend less — Php107

Why is this the case? Probably because prepaid subscribers become more aware of what they spend, since every time they need to restock their cellphone credits, they have to get cash out from their wallet.  There’s already prepaid cable TV, and the possibility of having prepaid electricity.  How will these options, especially the one for electricity, affect consumer spending habits?

Since going prepaid or doing away with subscriptions altogether generally forces consumers to spend less, it’s a method that many personal finance gurus recommend. Blogger Ramit Sethi calls this the A La Carte Method, in the article he talks about the many benefits of this method, however, he also mentions a disadvantage:

The big downside is that this method requires you to un-automate your life, which is the price you pay for saving money. I encourage you to use this if you find yourself short of cash and wondering why you can’t save more money each month.

Personally, I’m a prepaid Globe subscriber and I spend roughly P30 a week on cellphone credits.  I didn’t have cable TV until recently (just to watch the Olympics), but the Destiny Cable subscription is much cheaper in the long run than the Skycable Prepaid. However, I could easily go back to having no cable TV at all, since most of the things I want to watch are available through the internet and I didn’t have to follow channel schedules (I did it for over a year and didn’t miss cable that much).  How about you, how much of your expenses are prepaid?

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