Prepaid Broadband FAQ

prepaid broadbandHere are some of the most common questions about prepaid broadband and their correct answers:

Question #1: Is Prepaid Broadband Slower Than Contract Broadband?

Answer #1: No!  Internet data plans comes in many different forms, but there is nothing inherently slower about prepaid technology.  In fact, no contract prepaid broadband plans almost always share the same network with people paying contracts for their broadband plans.  The only difference is in the billing.  In fact, there are many cases where prepaid broadband speed packages are cheaper than contract based broadband services, and for a few good reasons.

The first reason is that there are no collections or accounts receivable issues when dealing with prepaid.  You pay first, then you get the service.  There is no risk of loss to the carrier as there are with billed services on a monthly basis that happen after the fact.  Add to this the fact that most carriers offer free or highly discounted hardware and make up their loss on the hardware with higher monthly prices and a safety net in the form of an early termination fee.  In short, there is nothing inherently keeping prepaid broadband from being cheaper than contract services other than the need for carriers to make money on their contracts.

This does not mean that some carriers may not decide to protect their contract based services by refusing to offer top-tier speeds to prepaid customers, but this is a very limited mindset and should not be prevalent in the long run.

Question #2: How Often Can I Change My Speed Package?

Answer #2: Most prepaid broadband plans allow you to change your speeds every single period.  This means that if you pay for a month in advance that when the month is up, you can just upgrade to the next speed or downgrade as you see fit.   This sort of flexibility is unheard of in the contract based internet data marketplace until at least the first contract is over with the exception of those that want to upgrade.  Even after that initial period, downgrades are generally very difficult and sometimes even expensive for those on contracts, but are easy for those on prepaid broadband plans!

Question #3: How Does Prepaid Broadband Work?

Answer #3: Prepaid broadband plans are a fairly simple proposition.  First you pay money, then you can have access for a pre-determined amount of time or data.  Some plans even combine the two, such as saying 30 days or 15 GB, whichever comes first.  Most such plans allow consumers to reload their plans easily in order to avoid any sort of service interruption.

Question #4: Why Do I Have to Buy My Own Hardware?

Answer #4: You probably need to bring your own hardware because carriers subsidize hardware purchases in order to pad their monthly premiums.  In such cases, carriers generally aim to get their money back on the hardware that they gave away or offered a staggering discount on by the end of the contract and have a safety net in place of an early termination fee for contract customers.  Since these mechanisms are not present to protect a carrier offering prepaid broadband, the only reason that they would subsidize a piece of hardware such as a modem is if the hardware is locked into that one carrier.  This may not be a big deal if you are 100% sure that the carrier is the only choice you are interested in for the next several years, but life has a funny way of changing your mind after a purchase doesn’t it?

Question #5: What Kind of Modem Should I Buy?

Answer #5: There is no easy answer to this one other than to say that you want to keep your options open.  Therefore, it would be wise to check the different carriers in your area and be sure that you have a piece of hardware that will work on multiple prepaid networks if possible.  Also be sure to check reliability and setup difficulty if you are not technically inclined as you may not get free support for 3rd party hardware from a carrier.

Question #6: How Can I Pay For Prepaid Broadband?

Answer #6: Each carrier is different and some even have certain offerings for some options that they do not have for others.  In general you can find payment locations, prepaid cards, or pay over the Internet with a bank account and/or credit or debit card.  Remember that each carrier will have its own rules, so be sure to understand them before making any purchasing decisions.