[patmcc]

It's a massive benefit. There's a couple parts to it, but a huge thing is you need to remember is there's effectively zero marginal cost to the ISP/cell carrier for the next customer - it's nearly all fixed costs.

If a pre-paid customer doesn't have the money, they'll either go without or downgrade their service. Less revenue for the company.

If a post-paid customer doesn't have the money...they might later. Their bill can be rolled forward, half paid, eventually sold to collections, whatever. More revenue in the long-term no question. Also, if you can charge your post-paid customers for all the things they opted into but didn't think too hard about the pricing on - SMS messages used to be $0.10 in my market, lots of parents opened up bills with 2000 text messages on them. Long distance and overseas calls were hugely expensive (and still are, in some cases) - big money makers for the carriers.

And contracts, of course. Customer acquisition is one of the biggest problems in the industry, getting people on a monthly billing cycle keeps them from easily switching.