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J.D. Power Ranks Prepaid Wireless Carriers

NET10 takes top spot first year in competition

July 30, 2009
One of the biggest disadvantages of using a major cell phone carrier is the requirement to sign a one- or two-year contract. There are non-contract alternatives, but how do they stack up when it comes to coverage and service?

J.D. Power and Associates is out with its 2009 U.S. Wireless Prepaid Customer Satisfaction Index Study to try and answer that question.

In the 2009 study, prepaid carrier NET10 ranks highest in overall customer satisfaction among non-contract wireless users, according to J.D. Power.

NET10, included in the study for the first time this year, achieves a score of 774 on a 1,000-point scale and performs particularly well in three of the six factors that drive overall satisfaction: performance and reliability; cost of service; and account management. Also ranking at or above the industry average in rank order are TracFone, Boost Mobile, Virgin Mobile, Alltel and T-Mobile.

ConsumerAffairs.com has received only nine complaints about NET10 over the last 12 months, on issues having to do with handset quality and accounting for minutes. The Web site has received 148 complaints about TracFone over the same time period.

"NET10 differentiates itself from other companies by simplifying the wireless experience with straightforward pricing, virtually no roaming charges and robust nationwide network coverage," said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. "Users find they don't have to worry about restrictive calling areas and can maintain their account without hassle."

The study finds that product offerings in the prepaid segment have changed dramatically during the past year, with many wireless carriers increasing their offerings of monthly plans--some of which mimic traditional contract plans, while others offer unlimited calling and texting. More than 40 percent of non-contract plans are monthly plans, compared with less than 30 percent in 2008.

In addition, overall satisfaction among users of pay-as-you-go plans - 756, on average - is considerably higher compared with users of monthly plans, driven by satisfaction with the performance and reliability and account management factors.

The study also finds several demographic differences that distinguish pay-as-you-go users from users of monthly prepaid service. The average pay-as-you-go user is older, more likely to be retired and has fewer wireless phones in their household.

The average monthly prepaid plan user more closely resembles the average contract plan user--desiring a large network, mid-range feature phones and messaging, but without the commitment or penalties of a contract. Two-thirds of monthly plan users report that they have switched service from their former contracted service carrier.

"As the non-contract wireless market continues to evolve, users need to be sure to explore all of the alternatives available to them in order to determine the appropriate plan that suits their needs," said Parsons. "With this increased breadth of options, wireless users can find a plan that optimizes their wireless experience and meets their budget without requiring them to sign a contract."

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