Could the entry of Walmart into the arena of prepaid cellular wireless, a rapidly growing market sector in the US [ read more here ] be a real big game changer in terms of pricing, offers and signal an even bigger shift away from contract cellphone service?

The announcement Wednesday that Wal-Mart, the United States’ largest retailer, will offer a branded low-cost prepaid service, “Straight Talk,” at the $30 and $45 levels, could end up being the “tipping point for millions of consumers who are already considering moving away from expensive contract-based cell phone service,” according to New Millennium Research (NMRC) executive director Allen Hepner.

With average monthly contract plans reported to be about $81, the more than 140 million U.S. contract-based wireless customers who use less than 550 minutes a month may now have even more reason to consider switching to a less expensive cell phone option, particularly in a changing environment in which plans for 1,000 minutes are available through Wal-Mart for $30 per month, according to Hepner.

Highlights of the March 2009 and December 2008 NMRC surveys include the following:

• Two out of five Americans with contract-based cell phones– are likely to cut back on their cell phones to save money if, as is widely expected, the economy gets worse over the next six months. (March 2009)
• No fewer than 40 million Americans – 26 percent of consumers with contract-based cell phone service — are “more inclined today than … six months ago to look at a way to save money on your cell phone bill, such as by switching to a prepaid cell phone service.” (March 2009)
• Of those Americans with cell phones, fewer than one in five (16 percent or nearly 29 million people) have a prepaid phone. Of the balance, 85 percent have “postpaid”/contract-based service where they pay a monthly fee. (The two percentages add up to more than 100 percent because of a small number of consumers who have both prepaid and postpaid cell phones.) (December 2008)
• Only 44 percent of those age 18-24 years of age say they know when their contract-based wireless phone penalty ends. This percentage increases to 58 percent among those 25-34 and reaches its peak of 61 percent with those age 35-44. The percentage decreases somewhat to 55 percent for those aged 45-64 and declines sharply to 37 percent among those age 65 and over. (December 2008)

Apparently the NMRC (New Millennium Research) thinks that the Walmart prepaid cellphone market entry is the “tipping point” that could lead to a serious game changer.

This and T-Mobile’s upcoming “Project Dark/Black” could definitely mean better competition as far as pricing goes. And for the consumer… that’s a good thing. But then again, Walmart did enter into the electronic music store business and it didn’t quite slow down the Apple iTunes Music Store either.

[ NMRC ] [ Walmart ]