Consumer Shift

Prepaid coming out of the shade. Not just for mobsters and drug dealers anymore !

Maybe Tony Soprano was onto something. As the lead mobster in the HBO series “The Sopranos,” he and his crew often turned to prepaid cellphones, presumably to avoid wiretaps.

But now these pay-as-you-go phones are winning over fans for different reasons — recession-battered consumers are buying them as a way to cut costs and avoid the lengthy contracts and occasional billing surprises that come with traditional cellphone plans.

“Frugal is the new chic,” said Joy Miller, 33, a piano teacher in Aubrey, Tex. After almost a decade on contract plans with Verizon Wireless, Mrs. Miller and her husband decided this month to test-drive a few prepaid plans, including MetroPCS. “In today’s economy, it’s not cool to pay $120 a month for a phone. It’s a waste of money.”

Although prepaid phones remain a fraction of the overall mobile phone market, sales of the category grew 13 percent in North America last year, nearly three times faster than traditional cellphone plans, according to Pali Research, an investment advisory firm. For the first time in its history, T-Mobile has been signing up more new prepaid customers than traditional ones. And Sprint Nextel is betting that a new flat-rate prepaid plan will help it wring more value from its struggling Nextel unit.