Mobile News

Operators are now extremely concerned about their growing dependence on current prepaid services and some are taking steps to reduce their prepaid base. In the UK, all four operators have adjusted their policy to place greater emphasis on postpaid customers. They have increased the price of their prepaid packages to a minimum of 69.99 (from 39.99) and at the same time cut the level of bonuses paid to retailers for each new prepaid subscriber. Operators in Denmark have also made a switch away from prepaid and have seen significant improvements in profitability as a result.

But operators cannot turn back the clock. Prepaid is now entrenched in most markets and it would be unrealistic to aim for the Finnish model (where prepaid is virtually non-existent). Instead, existing prepaid services will have to undergo a chameleon-like transformation in the light of the challenges highlighted in this report.

The introduction of the new model could mean that prepaid will resemble postpaid in almost every way. All (or nearly all) customers could be registered and credit checked for certain data services. Prepaid customers have eschewed postpaid models because they do not want to be tied to a contract, but customers may be persuaded to pay activation fees each month for some services.

The only key difference between and postpaid and prepaid is that one set of services will be paid for advance. But even this `fundamental’ could be eroded in time. Some customers may have both postpaid and prepaid accounts (eg voice and data services prepaid and certain m-commerce service postpaid).