Smartphones go prepaid at U.S. Cellular

Looking to expand its prepaid reach and tap into a rapidly growing market segment, U.S. Cellular Corp. (USM) unveiled a pair of no contract rate plans for smartphone devices.
The plans begin at $60 per month and provide unlimited messaging 2 gigabytes of data transmission and 450 voice minutes. Or, for an additional $10, customers will receive unlimited voice calling.
The plans are currently compatible with a pair of Android-powered smartphones; LG Electronics Co. Ltd.’s Apex ($250) and Optimus U ($200).
The prepaid pricing is dramatically less than the $110 per month U.S. Cellular charges postpaid smartphone users for unlimited calling, messaging and 5 GB of data transmission, though those postpaid customers do receive a larger device subsidy as well as other plan perks.
U.S. Cellular said it lost 11,000 direct prepaid customers during the fourth quarter of last year, but noted that smartphones accounted for 40% of device sales during the final three months of 2010.
The move continues a trend among many domestic operators that have begun offering highly desirable smartphones to customers looking to avoid signing a long-term contract. AT&T Mobility (T) earlier this week jumped into the space, which followed similar patterns by MetroPCS Communications Inc., Leap Wireless International Inc., Boost Mobile and Virgin Mobile USA.