Home
News
You are here

AT&T, T-Mobile, and Verizon have good reason to be optimistic amid postpaid struggles

The US prepaid market has returned to growth after years, with the Big Three emerging as the biggest beneficiaries.

By Anam Hamid

Updated: May 29, 2025, 6:17 PM

0comments

AT&T, T-Mobile, and Verizon's unpopular pricing decisions are catching up to them. There are signs that many consumers are opting for alternatives such as cable companies and MVNOs. The Big Three are seeing growth in another area though.

Light Readingreports that the US prepaid market has bounced back after a prolonged lull. AT&T, T-Mobile, and Verizon appear to be the biggest beneficiaries.

Prepaid plans require you to pay for services in advance. Postpaid customers, on the other hand, pay for services at the end of a billing cycle. Prepaid plans give customers greater control over spending and unlike postpaid plans, they don't leave room for overspending. Generally, consumers who want to save money opt for prepaid plans, which is why they aren't considered as lucrative as postpaid customers.

The US prepaid market returned to growth in the first quarter of the year for the first time since Q3 2022.

Verizon gained 137,000 prepaid customers in Q1 and the company expects positive results in the second half of the year as well. Verizon can finally breathe a sigh of relief that it made the right call by purchasing prepaid provider TracFone in 2021. The acquisition earned the company a market share of 33 percent, making it the biggest player in prepaid. This was the first quarter when it saw robust growth.

Our momentum continued to build in core prepaid where we delivered 137,000 net [customer] adds. Our strong execution and investment ... is paying off, and we continue to expect positive service revenue contribution from core prepaid in the second half of the year.

—Tony Skiadas, Verizon CFO, April 2025

AT&T and T-Mobile also witnessed prepaid growth, with the Big Three gaining a combined 47,000 prepaid customers in Q1 2025. This is a huge improvement over Q1 2024 when the three companies collectively lost 348,000 prepaid customers.

All our brands are growing at the moment in prepaid. And I think that we're going to see that going forward. I'm really excited, and this was the right decision for Verizon to buy TracFone.

—Hans Vestberg, Verizon CEO

Overall, both postpaid and prepaid markets defied expectations in Q1. Analysts at New Street now expect the US wireless industry to gain 1.6 million new customers in Q1.

Many analysts had previously forecast a downturn in growth due to the new administration's immigration policies. However, those fears have so far not materialized.

As for the revival of the prepaid market, MoffettNathanson analysts believe it comes down to two things. First, more new customers are opting for prepaid plans. Second, fewer people are switching from prepaid to postpaid and some are even migrating back.

The first would be that we are seeing more new customers entering the industry as prepaid rather than postpaid subscribers. The second would be that we are seeing fewer migrations from prepaid to postpaid, or even that we are seeing more migrations back in the opposite direction. (Obviously, these are not mutually exclusive; indeed, they would almost certainly be related.)

—MoffettNathanson analysts, May 2025

While data doesn't exist to back up this theory, T-Mobile did show a slowdown in the number of prepaid subscribers moving to postpaid plans, and this could very well be the case for AT&T and Verizon as well.

This can be linked to the current economic environment. People tend to go for postpaid when the economy is in good shape, while prepaid attracts more attention when the economic conditions are weak.

Regardless, this is a bright spot for the Big Three, considering they have been experiencing a higher churn or cancellation rate as well as stalling growth. This is also yet another sign of the stranglehold of AT&T, T-Mobile, and Verizon on the wireless market.

Switch to Total 5G+ Unlimited 3-Month plan or Total 5G Unlimited and get a free iPhone.

We may earn a commission if you make a purchase

Buy at Total Wireless

View Full Bio

Anam Hamid is a computer scientist turned tech journalist who has a keen interest in the tech world, with a particular focus on smartphones and tablets. She has previously written for Android Headlines and has also been a ghostwriter for several tech and car publications. Anam is not a tech hoarder and believes in using her gadgets for as long as possible. She is concerned about smartphone addiction and its impact on future generations, but she also appreciates the convenience that phones have brought into our lives. Anam is excited about technological advancements like folding screens and under-display sensors, and she often wonders about the future of technology. She values the overall experience of a device more than its individual specs and admires companies that deliver durable, high-quality products. In her free time, Anam enjoys reading, scrolling through Reddit and Instagram, and occasionally refreshing her programming skills through tutorials.

Read the latest from Anam Hamid