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May 28, 2013

No-Contract Cell Phone Plans Drive ZTE's Growth

ZTE Corporation, a company involved in making and selling mobile phones, has been named the fastest-growing company in the mobile phone market for the first quarter of 2013 due to its growth rate of 85.7 percent as tallied by Strategy Analytics. The company’s main selling point is that its phones do not have a contract saying when you can or cannot switch without incurring fees, and that as well as offering better quality phones than many other no-contract carriers has led it to grow very rapidly in the past year, and is now the fourth-largest manufacturer of phones in the world.

ZTE does sell to contract plan-based companies such as AT&T and Verizon, but its main draw has been with the non-contract carriers such as Metro PCS, AIO Wireless and Tracfone. For sheer convenience and non-commitment, especially if a phone is only needed for a short period of time, if a person needs a different number for whatever reason, or if they would not use all the data, messages or minutes provided in a contract plan and don’t feel like paying the set monthly bill, the pay-as-you-go option is becoming more popular.

As to how much more popular, a study by Pricewaterhouse Coopers showed that 29.2 percent of mobile phone revenue, which encompasses sales, upgrades and bills, comes from non-contract plans in 2013, up from 22.5 percent in 2012. These phones are often nearly as good as what you can get with a contract plan, as ZTE is making smartphones for this option that run on Android OS. This combined with the ease of having the plan and the ability to terminate it at any time have made it a very desirable option for those in the market for a phone.

ZTE has had an interesting history, most recently allowing backdoors in its phones with whoever holds the password hardwired into the phone, thereby greatly reducing the user’s security and privacy. Recently, it has improved its security in both the new and the existing phones, so that is not a worry among many who have the phones anymore. 




Edited by Rachel Ramsey


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