Recession forces Americans to cut wireless spending: Study
As fears about the recession become more widespread, millions of Americans are on the verge of disconnecting expensive mobile phone plans.
This was the key finding of a study conducted by Opinion Research Corporation for the New Millennium Research Council. The study found that two out of five Americans with contract-based mobile phones -- 60.3 million consumers -- are likely to cut back on their wireless service to save money if the economy gets worse over the next six months.
"The resulting shift in consumer habits is likely to come at the expense of contract-based cell phone service as more consumers seek to save money by using prepaid cell phones and cutting out cell phone extras," the report says.
Wireless extras such as Internet connectivity, email and texting are likely to take a hit in the economic downturn.
A total of 19 million Americans -- one in five mobile phone users with wireless 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.
More than two out of five mobile phone users with extras on their phones (41 percent) say it is very (19 percent) or somewhat (21 percent) likely that they will cut back on the extras if the economy gets worse in the next six months.
Fewer than two in five (39 percent) say it is "not likely at all" that they will make such cuts in the face of a deepening recession.
Among those who are likely to cut on back on their mobile phones to save money if the economy gets worse in the next six months are 44 percent of those aged 18-34, 54 percent of those in households making $35,000 a year or less and 55 percent of African Americans.
Two thirds of prepaid mobile phone customers say they are saving money compared to a landline phone or contract-based mobile phones. Fewer than three in 10 (29 percent) said they were not saving money.
Forty-eight percent of mobile phone users say that the extras on their phone such as Internet connectivity, email and texting are delivering a great deal (29 percent) or some (19 percent) value.
About one in five people see little value in such services. About a third of mobile phone users (34 percent) have no such extras on their phones.
"Most Americans are concerned about the current economic recession and have cut back spending quite a bit or somewhat," the report says.