Difference Between Prepaid and Postpaid Plans (With Table)

The world is moving ahead at a serious pace relying on technology to get everything done. As a result, mobile phones have become one of the most essentials tools to do so.

Mobile phones were initially invented to stay connected with anyone who is not physically approachable when needed. However, it has evolved into something much more, and hence cellular networks have also kept up with the pace to provide a seamless experience. The two most commonly used are Prepaid and Postpaid connections.

Prepaid Plans Vs Postpaid Plans

The difference between Prepaid and Postpaid Plans is the time instant when you pay for the services you use. A Postpaid Plan is paid as a bill at the end of a pre-decided time period while for a Prepaid Plan you pay upfront before using it. It usually includes a recharge and has a specific limit to it.

Prepaid Cellular Service is the one for which users pay upfront before using. The users purchase a recharge or these days commonly known as a Prepaid Plan, which is then used as mobile credit to do various tasks such as calling, texting, using the internet, etc.

Postpaid Cellular Service is the one for which users pay at the end of a time period. The users are provided with services beforehand and they pay the bill for it later on. The time period for provided services is pre-decided by the user and the provider. It can be 1 month, 6 months, 1 year, etc. depending on the plans available through the provider.

Comparison Between Prepaid Plans and Postpaid Plans

Parameters of ComparisonPrepaid PlanPostpaid Plan
Cost Of ServicesMostly budget-friendlySlightly more expensive than Prepaid
Cellular PlansIt is predetermined and won’t be accessible once the plan is expiredAccessible even after the pre-decided time period but the penalty for it may be added to the bill.
Data LimitOffers limited dataNo limit of usage
Customer Care ServiceGenerally poor and a long waiting timePrecise and customer friendly
FlexibilityProvides liberty to customize plans according to the needs.Only specific plans are available that cannot be customized. Any additional services are charged extra.

What Are Prepaid Plans?

As the name suggests, Prepaid Plans are the ones for which you pre-pay. The users initially pay money to a provider for recharge and then this recharge is credit into their mobile phones for further use. This credited recharge can be used to make calls, send text messages, or even using the internet.

All the major companies provide prepaid sim cards and they are generally very easy to get with valid documents and a government-approved ID. Some common providers are Vodafone, Airtel, Reliance Jio, etc. Since the launch of Reliance Jio Prepaid Sim in 2016, competition in the market rose by a tremendous height because of what Jio had offered to its users. As a result, other companies also started providing very competitive plans at an aggressive price. Hence, the recharge prices fell down by a huge margin.

Prepaid plans are the most commonly used. According to a report by World Bank, 96% of sim card users in India are prepaid customers.

What Are Postpaid Plans?

Postpaid Plans are the cellular network plans for which is paid for after the usage is done. The payment is in the form of a bill that is received after a pre-decided time period. This time period can be anything depending on its provider and the plan used by the customer.

Almost all the companies providing prepaid plans provide postpaid too. Providing postpaid sim cards is a detailed yet simple procedure as it requires a lot more information about the customer such as residential proof, a photo ID card, and a self-attested photograph. Nowadays, the prices of various postpaid plans have also become much cheaper than before.

Postpaid plans are generally used by businessmen, call centers, or various government sectors in order to provide this service to their employees.

Main Differences Between Prepaid Plans and Postpaid Plans

  1. Postpaid has its added advantages over prepaid. For example, many providers provide Netflix, Hotstar, Amazon Prime, and various other free subscriptions with the plan.
  2. Another advantage postpaid has over prepaid is the seamless experience it provides. Postpaid provides unlimited data to its users while prepaid users have a limited recharged credit to use. As a result, prepaid customers can’t use any services before they purchase a recharge again.
  3. Postpaid plans generally have better network quality than prepaid plans. Occassionally, prepaid networks can fluctuate causing the internet speeds to go down or temporary degradation of call quality.
  4. While postpaid has its benefits, it can also surprise you with bill shocks. Bill Shock is when the bill for services is higher than the actual plan bought. This happens due to irresponsible use, overuse, and/or any of the provider’s policies. Prepaid networks however, are much simpler and the user always knows the validity and limit to its use.
  5. Since prepaid plans easily fulfill most people’s needs, they are the right choice for a normal user. While pospaid plans are mostly a fit for those who need unlimited data, uninterrupted phone calls, and a constant high speed internet etc. It provides a seamless experience. The customer service provided to postpaid customers is also a smooth process and the issues are resolved immediately.

Conclusion

Since the arrival of Reliance Jio in 2016, the market has changed completely. Before that, prepaid plans were costlier, and postpaid providers offered better value for money. Nowadays the prepaid network providers have become so competitive, most people prefer using them due to very aggressive pricing. However, postpaid networks do still have noticeable advantages over prepaid. They both serve the same purpose with a few advantages and disadvantages over each other, thus targetting a different audience.

References

  1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2327734
  2. https://www.journals.resaim.com/ijresm/article/view/793
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