Why do cell phone service providing firms often charge higher price to pre-paid clients than those on contract?​

Contract customer ensures a regular income as compared to the pre paid users and hence cell phone service provider prefer to hold these customers by lowering their services rates

Explanation:

Prepaid phone call rates are higher than the call rates of contract phone services because the contract services ensures a minimum of certain amount per month. Along with that the service provider charges an activation charge prior to providing contract services hence they make the call rates and rates of other services like internet low for contract customers.