Skip to main content

Growth of U.S. Pre-Paid Mobile Phone Service

Dow Jones reports that the pre-paid wireless customer, once scoffed at by wireless carriers, has now become a valuable source of business for the industry. Pre-paid customers offer lower revenue and margins, and are more likely to cancel their service. But with an expected slowdown in wireless growth, the carriers are more willing to open up to different avenues of growth.

"You'll see a slowdown in revenue growth over the next couple of years," said Todd Rethemeier, an analyst for Soleil Securities Group. "We're running out of good customers in this industry. Do you know anyone who doesn't have a cellphone?"

Take Sprint Nextel, it added 1.4 million net new customers in the fourth quarter. Of that total, 624,000 (45 percent) came from its pre-paid service Boost Mobile. The mix of pre-paid customers was surprisingly strong, and helped Sprint meet expectations.

This growth also comes at a time when voice revenue is declining. Once again, Sprint posted lower average revenue per user for its post-paid business in the fourth quarter, overshadowing solid growth in the data business.

The high hopes pegged to data revenue may be why the carriers have been aggressive in staking out as many customers - pre- or post-paid - as they can. While pre-paid customers typically generate less voice revenue, industry experts believe they are willing to embrace new technology such as music downloads and text messaging. The demographics of the pre-paid base - typically younger customers - are more aligned toward data applications.

Popular posts from this blog

Global Digital Business and IT Consulting Outlook

Across the globe, CEOs and their leadership teams continue to seek information and guidance about planned Digital Transformation initiatives and the most effective enterprise organization change management practices. Worldwide IT and Business Services revenue will grow from $1.13 trillion in 2022 to $1.2 trillion in 2023 -- that's a 5.7 percent year-over-year growth, according to the latest market study by International Data Corporation (IDC). The mid-term to long-term outlook for the market has also increased -- the five-year CAGR is forecast at 5.2 percent, compared to the previous 4.9 percent. Digital Sevices & Consulting Market Development IDC has raised the growth projection despite a weak economic outlook, because of vendor performances across 2022, growth indicators from adjacent markets, increased government funding, and inflation impacts. The actual 2022 market growth was 6.7 percent (in constant currency), which was 87 basis points higher than forecast last year, alth

Open Banking Usage to Grow by 470 Percent

The Open Banking business model has been advantageous for Third-Party Providers (TPPs), helping them to extend their offerings into other areas of financial services with new capabilities. Open Banking is also advantageous for traditional banking institutions, despite the perceived loss of custodianship over their data, by providing greater accessibility to more bank services. Furthermore, Open Banking can help serve Mobile Internet providers that are able to leverage it to create tailored services according to customers’ preferences and/or economic limitations. Open Banking Market Development Since traditional banking services are made more convenient by TPPs via greater data access, customers can proactively manage their finances and shape the development of new financial offerings. This is particularly noticeable in the realm of Digital Payments, where retail merchants and customers transact through eCommerce, which has the greatest number of use cases for Open Banking. These includ

Why Instant Issuance Payment Cards Evolved

The global financial services sector continues to grow as more progressive organizations seek to gain a meaningful competitive advantage from their digital transformation initiatives. Across the globe, many regions are seeing a significant rise in 'instant issuance' activity from a physical and digital perspective, from both traditional and emerging innovative banking institutions. Digital Payments Market Development Customers increasingly demand instant access to banking services, with physical instant issuance enabling them to leave their branch equipped with a ready-to-go payment card. According to the latest worldwide market study by ABI Research, the market for instantly issued physical payment cards will increase from 243.2 million shipments in 2022 to a forecast of 471.1 million in 2027. "Critically, instant issuance of payment cards is no longer limited to the physical," said Sam Gazeley, industry analyst at ABI Research . Indeed, the growing digitization of p