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Weekly UpdatesWith wireless penetration exceeding 44% and more than 130 million wireless subscribers, the new focus is on prepaid wireless plans. Can carriers make prepaid wireless profitable?
Every traveling professional and twenty-something has a phone--thus, carriers have begun to look for alternative subscriber bases to continue adding new customers. These new customer bases include the youth market, ethnic minorities, and the credit-challenged, according to a new report, "Can U.S. Carriers Become Profitable in Wireless Prepaid?".
The Yankee Group believes that prepaid wireless services will better enable carriers to reach out to these alternative subscriber bases and make wireless phone usage a more appealing option to a larger percentage of the population. According to forecasts, at the end of 2001 approximately 12% of all wireless subscribers were prepaid subscribers. By the end of 2006, the Yankee Group believes that this figure will grow to exceed 30%.
"In order for carriers to make prepaid a successful product offering, some of the dynamics of prepaid wireless must be adjusted," states Knox Bricken, senior analyst at the Yankee Group. "In most existing prepaid relationships, carriers do not have regular contact with their customers. In fact, carriers do not even know who approximately 50% of their prepaid subscribers are. This makes it difficult to develop long-lasting relationships with subscribers and work to continually increase ARPU and reduce churn," Bricken said.
The Yankee Group believes that carriers, in an effort to alter the often detrimental effects of pure prepaid, will begin to turn more toward hybrid solutions in which carriers develop a stronger customer relationship.
The Yankee Group
The Yankee Group is a global leader in technology research and consulting. Our customers, which include technology vendors and users, benefit from our accurate, reliable, and trusted research, consulting, and personalized one-to-one client interaction covering communications and IT products and services. Now in their fourth decade, the company is headquartered in Boston and maintains offices throughout North America, Europe, Latin America, and the Pacific Rim.
For more information, visit http://www.yankeegroup.com or call 617-880-0214.
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