Mobile News

Prepaid services first put in an appearance in the late 1990s. The world’s cellular market has had a period of strong and sustained growth, with annual rates of around 50% per year since 1998. Over one in ten people across the world are now mobile communications users. A strong factor in this growth has been the development of prepaid, which now accounts for almost half the total customer base and continues to drive mobile penetration levels far beyond forecasts of only a couple of years ago. During 2000, over 70% of the mobile market’s net additions went to prepaid services. Prepaid, which was once regarded as a niche market service by many operators, is now an essential part of any operator’s portfolio.

There is already some indication that, as very high mobile penetration rates are reached in most of the developed markets, saturation point is approaching. Some first quarter 2009 results suggest that the mobile market’s annual growth rate is slowing at last and therefore we have forecast quite a marked drop in growth in 2009. (The global summary forecast appears at the end of this section).

There are indications that operators are beginning to rethink user acquisition strategies, and focusing on improving customer retention and increasing usage. Therefore, we forecast lower growth in this sector as well. Even so, we still forecast that, in 2009, a higher percentage of net additions will go to prepaid than did in 2000–77% to 2000’s 74%–mainly due to the strong growth of prepaid in the under-developed regions like Africa. Prepaid is also expected to become much stronger in the North American countries in 2009. From 2009 on, prepaid is forecast to capture more than three quarters of total net additions. This means that, by the end of the forecast period, over 64% of the total mobile customer base–1.1 billion users–will be using prepaid services, generating almost 40% of mobile service revenue, and prepaid penetration of the world will be 16%.