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Prepaid ready for the future

Week 43, 2008

Even morestriking is the fact that prepaidsubscriptions grow twice as fast aspostpaid.

Of course, the prevalence ofprepaid varies a lot betweenregions and consumer targets. Forinstance, Asia Pacific represents43% of global subscriptions andalmost 30% of revenues. Also, inIndonesia, prepaid accounts formore than 97% of mobilecommunication services users. Forthe 2007-2013 period, as the wholeindustry is after the next billionsubscribers, the prepaid marketwill account for over 80% of newmobile subscriptions.

Our industry is at the core ofprepayment, in a global manner.The industry started to take offwhen the prepaid phone cardrepresented a great source ofincome and cash flow for payphoneoperators. Besi destelecommunications, prepaid hasbeen implemented in a variety ofenvironments, and in manyoccurrences, using a smart card.For instance, one may think ofelectronic purses, transportsubscriptions, or even prepaidcards for utility meters.

Prepaid is to come into more favorthan ever in times of credit crisis.After years of easing credit, thereis no doubt credit conditions arebecoming tighter, and the wholefinancial industry will develop anaversion for risk. The right answerto avoid risks, as well as todevelop float for a serviceoperator is prepaid schemes. Nodoubt the crisis will trigger thedevelopment of more prepaidschemes, applied to every singleconsumption area.

Our industry, with its expertise inelectronic transactions has a roleto play in developing newapplication fields for prepayment,new systems developments, etc…Let's be creative, and propose thebenefits of prepayment to allservice operators.

Thierry Spanjaard
Chief editor
Smart Insights