Trade-off of the day: Commitment vs Costs

Commitment to a service is a good deal for the service provider, but bad for consumers:

...prepaid customers [month-to-month vs 1-yr+ contract] generate less revenue per month than post-paid customers. They are more likely to switch back and forth between service providers. And they typically use more network resources, averaging around 2,000 voice minutes per month compared to about 1,000 minutes per month, than post-paid customers, according to Craig Moffett, a Sanford Bernstein equities analyst.

Commitment to a regular long-term service reduces the hassle of looking for the best deal and setting up a new account. And you end up paying for the convenience through over-priced plans.

tags: trade-off, communication, network, problem, solution, infrastructure, velocity