Consumers rarely exceed cellular plans.
The phenomenon of "breakage" is well understood in the gift card and prepaid phone card industries. Breakage is the unspent amount on the card, which is pure profit for the company selling the card. What about breakage in the cellular industry, though? The wild profits earned by cellular carriers from overage — consumers exceeding their plans — have been widely documented. How many people under-use their plans?
It turns out to be significant. While searching for this information yesterday, I came across a Consumer Reports paper, republished on the Pharos International Website, offering recommendations for consumers on cellular phone use.
Are the real profits for the cellular carriers in consumers who exceed their plans, or in the monthly breakage?
October 26th, 2007 at 12:27 pm
This is great Alex. From our perspective, this reinforces the fact that using mobivox from cell phone to call mobivox or skype anywhere is truly 100% free for most people.
Mark, (mobivox)