The phenomenon of "breakage" is well understood in the gift card and prepaid phone card industries. Breakage is the unspent amount on the card, which is pure profit for the company selling the card. What about breakage in the cellular industry, though? The wild profits earned by cellular carriers from overage — consumers exceeding their plans — have been widely documented. How many people under-use their plans?
It turns out to be significant. While searching for this information yesterday, I came across a Consumer Reports paper, republished on the Pharos International Website, offering recommendations for consumers on cellular phone use.
Are the real profits for the cellular carriers in consumers who exceed their plans, or in the monthly breakage?