Prepaid wireless clearly is growing. In the first quarter, for example, about 61 percent of the new net customers T-Mobile added were prepaid accounts. In the fourth quarter of 2008, T-Mobile added 57 percent prepaid accounts. In the first quarter of 2008 T-Mobile added 25 percent prepaid customers.
So the big question is what those customers might do once the recession is over and there is less need to watch spending on mobile and other communications and entertainment services.
Wireless analyst Chetan Sharma thinks it is possible that "it is quite likely that 50 percent to 60 percent of such consumers don’t go back to postpaid."
For major wireless providers, this will mean a decline in average revenue per user. For prepaid providers, the trend will mean continued opportunities to take market share from postpaid providers.
The other trend is that although prepaid traditionaly has been viewed as a niche segment for lower-income customers, that could be changing. Lots of customers who traditionally have used postpaid plans might find they can get along quite nicely using prepaid.
Over time, even smart phone customers will find they are able to buy prepaid service that allows them to use higher performance, later model devices with prepaid plans.
1 comment:
Postpaid is really starting to not make sense anymore. The only real barrier to getting to a 90%-100% prepaid market is the availability of handsets and services. Both are improving significantly, however, until people can get a prepaid iPhone or Palm Pre, and reasonable data pricing, postpaid will still have a value to some.
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