Posted on: Tuesday, December 18, 2001

Prepaid service can save money

By Greg Wright
Gannett News Service

Some computer users who are tired of paying a flat, monthly fee for more Internet service than they use are saving money with prepaid plans.

While dial-up service costs from $10 to $25 per month for hundreds of hours of connection time, prepaid service providers only charge customers for how much time they plan to spend online. For example, AT&T PrePaid Internet Service (att.com/prepaidinternet) charges $9.99 for eight hours of online time, while MaGlobe, another provider, charges 99 cents per hour.

Sprint (sprintppi.com), AT&T and MaGlobe are among the companies that launched prepaid Internet service this year, and consumers are expected to buy $10 million in prepaid access in 2001, said Henry Goldberg, a senior analyst with Cahners In-Stat Group in Scottsdale, Ariz.

But in just a few years Americans could purchase hundreds of millions of dollars worth of prepaid Internet because, "there are a number of different customers that would be potentially interested in prepaid Internet," Goldberg said.

Prepaid Internet service is targeted at travelers who need quick Internet access on their laptop or personal digital assistant, Goldberg said. College students and consumers with little or poor credit who can't get a monthly ISP account also are potential customers, he said.

It also makes sense for people who surf the Web a few hours a month or for broadband customers who need a dial-up backup in case their cable modems or DSL fail temporarily.

"There are a lot of customers who are not using 25 to 30 hours a month and are not getting their money's worth (from ISPs)," said Kelly Carnago, director of Sprint prepaid products.

Michael Philpot, 31, of Fairway, Kan., closed his America Online account a few months back because the basic monthly fee rose to $24.99 from $21.99 a month and he used the Web just a few hours a month. Philpot signed up for Sprint Prepaid Internet service last month, a move that saves his family and his flooring business about $15 per month in Internet fees.

Prepaid Internet service software is sold at retailers such as Staples and CompUSA. It also can be purchased through the Internet.

Despite convenience and lower cost, you probably won't get the same level of service with prepaid Internet you might get with an ISP.

Most basic prepaid Internet plans give customers only a single e-mail account. And your prepaid Internet inbox might be so small — 2 megabytes with MaGlobe — so you cannot receive e-mail with a lot of photos and other attachments.