The Washington, D.C., think tank New Millenium Research Council (NMRC) yesterday reported the results of a survey that suggests consumers are cutting back on cell phone costs or switching to prepaid plans.
Past surveys from a variety of different research groups have suggested that consumers would rather cut back on food and clothing than on their cell phone costs. The new report suggests that’s all changing.
The survey of 2,005 Americans was conducted by Opinion Research Corporation (ORC) for NMRC.
Results from the survey showed that two out of five Americans with contract-based cell phones, or 39 percent or 60.3 million consumers, are likely to cut back on their cell phones to save money if, as is widely expected, the economy gets worse over the next six months.
The study also found that a potentially major shift in consumer habits at the expense of contract-based cell phone service is under way as more consumers seek to save money in the face of the recession.
The report stated that no fewer than 40 million Americans, or 26 percent of consumers with contract-based cell phone service, are “more inclined today than ... six months ago to look at a way to save money on your cell phone bill, such as by switching to a prepaid cell phone service.”
That group includes 38 percent of those in households making $35,000 a year or less, 32 percent of African Americans and 30 percent of those aged 18-34.
Cell phone extras such as Internet connectivity, e-mail and texting also are likely to take a hit in the economic downturn. A total of 19 million Americans, or one in five cell phone users with cell-phone extras, have “considered cutting back” (5 percent) or actually “have cut back” (15 percent) on such features “in the last six months because of actual job loss, fear of job loss, the recession, or any other related financial concerns.”
“The era of cell phone penny pinching is officially here. Thanks to the recession, the U.S. cell phone marketplace is undergoing fundamental changes that will just get bigger as the economic downturn deepens,” said Allen Hepner, scholar at NMRC.
“It is important to note that these findings do not just point to a potential shift in consumer attitudes and habits about cell phones. The change in thinking and purchases is clearly already taking place and has been for months,” said Graham Hueber, senior researcher for Opinion Research Center.
Two-thirds of prepaid cell phone customers say they are saving money compared to a landline phone or contract-based cell phones. Fewer than three in 10 (29 percent) said they were not saving money.