Prepaid is the New Wireless Battleground

This week, both AT&T and Verizon Wireless reported steep declines in the number of customers who signed up for cell phone contracts during the first quarter of 2010. AT&T said it only added 512,000 customers under contract, also known as postpaid subscribers -- down 43 percent from a year ago. Verizon Wireless said it added only 423,000 customers under contract, down 55 percent from the same period a year earlier. Analysts have said that most of the growth in the wireless industry is now stemming from pay-as-you go, or prepaid, phones, which are typically more affordable for consumers. "The postpaid wireless industry is hitting a brick wall," said Craig Moffett, an analyst with Bernstein Research. Slick new smartphones like the iPhone and Motorola Droid have helped the wireless carriers court new customers, but even that sheen may soon fade. AT&T will eventually lose its exclusivity with the iPhone.