Monday, November 19, 2018
Prepaid Trends: A Telecom Industry in Evolution or in Revolution?
The prepaid industry in 2018 will not resemble the industry of 2014. The bulk of society’s changes over the past five years stem from technology benefits, the technology crash, and the World Trade Center disaster. While some analysts forecasted the demise of the technology revolution after the 2000 tech bust sent technology company values plummeting, the reality has been the contrary. Telecom, entertainment and media firms – as well as other technology companies – have had to find ways to improve their margins, revive shrinking demand and create a new dynamism to drag them out of crisis. During these last Darwinian years, indeed, some important technology improvement have found a way to our homes and daily lives, and finally changed the way we live. Just as prepaid products are everyday products made to fit people’s ways of life, the prepaid industry has evolved to fit new lifestyles.
First of all, we changed the way we communicate. Communication means have become more mobile, more present (thus more annoying) less expensive, simpler, more useful and, true to the technology industry’s eternal search for improvement, more intelligent. Whether or not every change has been positive is debatable, but we can say that this evolution has considerably altered the manner in which we fulfill the basic human need to communicate. Fifty-eight percent of the US population owned a cell phone as of December 2004, including forty-one percent of preteens and teenagers (11-to 19-years old), a significant portion of which use increasingly popular prepaid plans. ATLANTIC-ACM estimates that between 2016 and 2019, nearly ninety percent of new cellular users will choose prepaid plans.
Of course, these penetration figures are still small in comparison with European wireless penetration rates that are into the 100 percent-plus range, but the development of unlimited night and weekend minutes plans and large communication service bundles (family plans, free in-network calling, service bundles incorporating wire line and wireless services, etc.) have altered the landscape. If we add to these factors the skyrocketing penetrations of landline VoIP plans and cable telephony, the reality is that domestic prepaid card users are increasingly fewer and further between. In other words, the prepaid calling card market is shrinking as a consequence of new technology trends. Even though VoIP adoption and healthier balance sheets have pushed carriers to offer better rates for their domestic calling cards, competition from substitutes is insurmountable and the domestic prepaid cards’ revenues will continue to shrink at an annual rate of –17.5 percent from 2005 to 2009.
On the other hand, the international prepaid card market continues to expand – supported by increased demand as more foreign-born users are living in the United States and dropping prices boost volume. The average international minute rate has been divided by six between 1998 to 2004, and these rates will continue to shrink due to the combined effect of technological improvements reducing the cost of communications transportation and continued deregulation in telecom landscapes around the world... However, the international side of the industry also faces competitive substitutes. Prepaid wireless carriers have access to emerging technologies, too, and are eager to compete for the (relatively) fat-margin revenues international calling represents. Unlike traditional wireless carriers that have mass-market models and are not effective at meeting the needs of niche markets, new prepaid wireless carriers have studied and understand the prepaid niches. Mobile Virtual Network Operators (MVNOs) have blossomed like flowers these past two years based on their marketing prowess. Boost Mobile, child of the young-at-heart Virgin Group, resells Sprint PCS services under its own brand though its own youth-oriented prepaid wireless service to nearly two million customers – not bad in only two-and-a-half years of service. Tracfone, which was one of the first MVNOs in the US – although it is not yet ten-years old – passed the three million subscriber mark in 2004, and continues to resell services from both AT&T Wireless and Verizon Wireless.
MVNOs are capturing market share from traditional wireless carriers on the prepaid front and ATLANTIC-ACM expects that MVNOs’ prepaid wireless subscribers will represent 63 percent of the total prepaid wireless customer base, or 18 million subscribers, at the end of 2005, and nearly 80 percent of prepaid wireless subscribers, or 32.7 million, by 2009.
Is the prepaid market undergoing a revolution? Probably not. But prepaid products have always been evolving with the progress of technology, the march towards a cashless society, shifts in our habits and lifestyles, and with the new, more communicative, world in which we expect to be able to talk worldwide any time and any place. The prepaid industry is a transforming industry at its core, following customers’ needs and desires. Evolution is its detail for retail. Hence, an evolving industry it is and it will remain, because prepaid providers have learned to re-invent themselves more frequently than Madonna. Cellular Phone Prepaid Services Provider. Retail Licensing Provider of Bill Payment Services & Cellular Phone Prepaid Services Provider Technologies.
The above statements are just how far the Prepaid Cellular Phone Market has come, Now is the right time for Merchant Retailers to Jump on Board for offering Payments to there walk-in customers, that's designed to bring back repeat foot traffic.
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