Prepaid Cellular Services going for affection!
With substantial growth expected to come from the prepaid wireless market, national carriers are beginning to pay more attention to the one-time red-headed stepchild of the coveted postpaid customer.
Analyst Fedor Smith of Atlantic-ACM said that as wireless has become more ubiquitous, the expectations of some prepaid customers have risen. They now expect to be able to access the same services that postpaid customers can use, including various messaging services and data services.
"They are upwardly mobile in terms of demand and expectations," Smith said. He added that while the low-cost, basic voice prepaid customer still dominates the market, a more sophisticated prepaid customer also exists—often falling into the urban youth category between the ages of 18 to 26 years old.
"A lot of them want a basic phone with five-cent per-minute calling. … That’s a market that’s always going to be there. But there are consumers who want more. … They might not have a lot of credit or cash in the bank, but they can still afford to buy high-end sneakers. It’s not that they don’t have any money—they don’t have any credit or reliable cash flow per se."
A recent study from J.D. Power and Associates found that prepaid customers spent about $38 per month on average when they bought additional airtime.
Wireless retailers cannot ignore the trend of flattening of postpaid growth and the competition’s focus on the prepaid segment as an engine for continued growth.
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