Millions To Cut Cell Phone Spending

While we don't expect people to get rid of their cellphones during the recession -- it seems that cutting the landline is more likely -- it does make sense that people would cut back on extras or trim their mobile budgets.

From BusinessInsider.com -- So a survey whose results suggest that "millions more are poised to [cut back on their cellphone spending] if the economic downturn continues as expected for another six months" sounds right to us. (The "New Millennium Research Council" will unveil the results on Thursday afternoon.)

What does this mean for cellphone carriers?

Well, it's obviously not good news for the big ones like Verizon (VZ) and AT&T (T), which have the most to lose. Even if they don't lose subscribers, they could still see lower monthly spending or more subscribers switching to "prepaid" plans, where carriers aren't guaranteed much monthly revenue. If it gets bad enough, it could also potentially cause carriers to cut prices.

But it could end up benefiting some upstart carriers like MetroPCS (PCS) and Leap Wireless (LEAP), which sell cheap, all-you-can-eat cellphone service for around $35 to $40 per month, and have a much lower cost structure to support those plans.

SOURCE: http://www.businessinsider.com/millions-poised-to-cut-back-on-cellphone-spending-2009-3