Technologies, price pressures to shape mobile market

Dylan Bushell-Embling
23 Apr 2010
00:00

But for the prepaid mobile market, technologies aren't the only transformative pressures operators are grappling with. This segment is facing major challenges-pressures likely to force the first major strategic changes since the market first developed, according to a separate report from Strand Consult.

While the price difference between prepaid and postpaid offerings is marginal, the average prepaid customer now has significantly lower ARPU compared to subscribers, Strand said.

Ten overarching trends in the market are cumulatively reducing the margins on prepaid products, threatening to transform what was once a cash cow into a "nightmare," the research firm said.

These include the popularity of cheap SMS packages with huge numbers of messages included, tumbling data and international traffic tariffs and the growing practice of offering cheap or free on-net traffic.

At the same time churn rates are exploding, and consumers in developed markets are increasingly using SIM cards from multiple providers - as evidenced by penetration rates of over 120% in some countries.

The growing popularity of prepaid mobile broadband is also putting pressures on margins, Strand said.

Sales channels for prepaid products are also evolving, with the internet increasingly being used as a distribution medium for SIM cards and top-ups. This has had the effect of decreasing recharge costs in many countries.

As a result of these pressures and growing penetration, operators are abandoning the battle over new customers in favor of a fight to retain existing customers.
But with pricing the traditional means of competing for prepaid subscribers, many operators have lost faith in the charging model, Strand said. Instead they are fighting to entice their prepaid customers into subscription accounts.
 

Pages

Follow Telecom Asia Sport!
Comments
No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.