Mobile operators have long perceived prepaid offerings as low-end products. With the rise of affordable smartphones and data plans, youth can now opt for prepaid plans instead of having to rely on family contracts where handset costs were subsidized. But there is more to prepaid that attracts the attention of young customers and will continue to do so in the future. This briefing explores the following key questions relevant to prepaid services:
1. Why should mobile operators focus on prepaid offerings?
2. Why do youth prefer prepaid over postpaid offerings?
3. What are the differences, if any, between young prepaid and postpaid customers?
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2. Licensing and Copyrights
3. In this briefing
4. Executive summary
5. Section 1. Why should mobile operators focus on prepaid offerings?
6. North America has predominantly been a postpaid mobile market
7. Recent net adds for major US operators have been largely prepaid subscribers
8. New prepaid subscribers are key drivers of smartphone market growth in the US
9. Section 2. Why do youth prefer prepaid over postpaid offerings?
10. Mobile owners considering to switch carriers don’t find value in long term contracts
11. Youth prefer prepaid due to its emotional appeal, not price or discounts
12. Second-hand smartphones allow youth to overlook the handset subsidy found in postpaid contracts
13. Youth on prepaid use their mobile to access the internet more than voice calls or SMS
14. Section 3. What are the differences, if any, between young prepaid and postpaid customers?
15. Operators have discouraged subscribers from prepaid offers due to low ARPU & high churn
16. Prepaid customers stick with the brand for the same period as a postpaid contract - 18 months or longer
17. Mobile operators can recover acquisition cost of prepaid subs sooner than that of postpaid subs
18. Need more insights and data?