More than 60 million consumers are poised to dump their cell phone contracts and pare back on “extras,” such as texting and mobile Web access, a new survey shows.

The study released by New Millennium Research Council finds that two out of five Americans with cell phone contracts, or 39 percent, are likely to cut back on wireless service whether the recession deepens by the next six months.

About 19 million consumers — representing one in five cell phone users who have additional features — have actually cut back or have considered doing so in the past six months.

“The true era of cell phone penny-pinching is here,” says scholar Allen Hepner at the Washington, D.C.-based think tank. The group accepts funding from a variety of sources, including telecoms.

To save money, many consumers may wind up switching to prepaid plans, which tend to be cheaper, he says. Cell phone users with contracts spend about $60 a month,

on average. Monthly prepaid plans start at about $10 a month.

Only about 17 percent of U.S. cell phone consumers currently use prepaid, but the figure is “creeping up” by a percentage point or two a quarter, thanks to the recession, says Roger Entner, head of telecom research for Nielsen.

Outside the USA, prepaid is far more popular, representing 30 percent to 80 percent of users.

Prepaid products are a lot less profitable than contract-based services, Entner notes. That’s why big carriers tend to not push prepaid too hard, he says. “They barely break even on prepaid” products. Contract services can have profit margins of 50 percent.

The U.S. trend toward prepaid has been picking up steam for a while, but the New Millennium study is among the first to attempt to quantify it.

Potentially chilling for U.S. cell phone carriers: 19 percent of consumers who don’t have a cell phone…

Original post by dhiram