The Prepaid Press - February 15, 2008 - (Page 6)

PREPAID BUSINESS February 15 · 2008 - 6 Mark Flanagan, CEO of PrepaidWireless.com Interviewed by Stephen Morrill Prepaid wireless calling was hot in the past, hotter now and scorching its way into the future as more Americans choose prepaid over post-paid and convert to prepaid plans more than ever before. We spoke to Mark Flanagan, President and CEO of PrePaidWireless.com, on a wide range of prepaid wireless changes and trends. Flanagan has been in the wireless industry almost since its inception and today runs one of the largest online portals selling prepaid wireless products and services. PrepaidWireless.com manages the online sale of airtime refills and handsets for a growing number of prepaid service providers such as Airlink Mobile, Azteca Mobile, Jump Mobile, Mojo Mobile, Lucky Wireless, Omni Prepaid, Prime Mobile, Ready Mobile PCS, Powerlink Mobile, Total Call Mobile and Xtreme Mobile. SM: Why has prepaid wireless become a mainstream service? MF: There are a number of reasons that fuel prepaid wireless to popularity today including low rates, no contracts and no credit check requirements. To many consumers, it’s less hassle and a better way to budget their money. But one of the biggest reasons is that carriers are now addressing and marketing their prepaid service programs more aggressively. Take a look at the AT&T GoPhone. They have done a terrific job marketing and branding the GoPhone program. Their CEO recently commented on the success of the GoPhone prepaid program and how strategic the program is to the long term plans at AT&T Mobility. The monthly GoPhone plan, which has been extremely successful, provides a set bundled amount of anytime minutes and unlimited nights and weekends and requires a credit card on-file from the subscriber. From a consumer standpoint, many people are finding themselves in post-paid contracts where they can’t justify spending $50-$75 per month, used anytime night or day. The expiration is typically 30 days to 365 depending upon the amount purchased. - Bundled/Hybrid Plans have a set number of minutes per month with free nights and weekends. A hybrid plan is a monthly bundled plan that requires a credit card from the consumer that is charged each month for the plan selected by the subscriber. These plans typically expire in 30 days, although some providers do offer 7 and 15 day expiration plans. - Unlimited Local Calling Plans. Offered to meet the competition from the various landline plans that offer flat monthly rates for calling anywhere within the U.S. and Canada, these plans have become vary popular in the wireless sector. Metro PCS, Cricket and Boost Mobile are the three primary players in that market. The Unlimited Local Calling Plans have 30-day expiration as well. Recently PowerLink (owned by AirLink Mobile) launched an unlimited mobile plan as well. But, where the others restrict you to a specific 5 MINUTES WITH to the consumer. As a consumer, the main goal is to find a calling plan that meets your calling needs and monthly budget. For example, if you are a low volume user (100 minutes or less per month), you should try and find a service provider that offers an airtime plan with up to a 365-day expiration period, Airvoice Wireless, Total Call Mobile or T Mobile offer such plans at a cost of $100. Now you are paying less than $9 a month if you are using 100 minutes or less per month. I defy you to find a postpaid plan that costs less than $35 per month. If you find yourself needing to make calls at night and on weekends then you should choose a bundled rate plan that gives you a set number of anytime minutes and unlimited night and weekend minutes. Service providers like Airlink Mobile, AT&T GoPhone, Movida Cellular, Platinum Tel and Xtreme Mobile offer very competitive bundled rate plans. There are several websites such as www.prepaidreviews.com, www.myrateplan. com and www.prepaidphone.com where consumers can get up to date information on prepaid phones and service plans and even provide online cost comparisons between service providers. SM: What is the typical cost of a prepaid phone for a consumer? MF: There seems to be a magical price point of $39.99 and under when addressing the prepaid handset market. While some industry folks are saying that the prepaid consumers are becoming more demanding and want all the bells and whistles on their phone, I don’t see it quite that way. I feel the market is very price driven. you can quickly make an airtime purchase for the amount you need. It is important that service providers provide alternative methods for their subscribers to purchase their airtime refills. Service providers have to bring convenience and alternative methods to their subscribers to help reduce churn and increase average revenue per user. SM: Are there any other advantages to the consumer for buying online instead of at a retail location? MF: The biggest advantage is convenience and cost savings. One of the more annoying aspects of any prepaid wireless plan is having to go to a retail location to buy airtime minutes when you run out. That’s a big negative for a lot of people who would prefer an easier way to buy an airtime refill for their account. That’s where we take the inconvenience out of the equation, providing a simple and fast method to buy whatever you need right from the internet 24/7. You never have to worry about us being out of stock. Our customers also get special discounts, cash savings on many airtime refill products and pay no sales tax, providing them with additional savings. We also have a rewards program. These are benefits you just don’t get when you buy at a retail location. SM: 2007 was not a good year for many MVNOs. How do you see 2008 shaping up? MF: We certainly had some casualties in 2007, even with many well-funded companies such as Amp’d Mobile, Disney Mobile and XE Mobile. This goes to show that the wireless sector is a very competitive market. With low profit margins and inherent risks, a business must be very careful with the plan of execution and watch where they are spending their dollars. Getting to profitability is paramount because the finance community does not soon forget these casualties that we saw in 2007. I think for the most part MVNOs have quickly learned that you cannot act like a carrier. You have real costs in airtime, unlike the carriers that own the airways. So it is much better to proceed with caution than without. Hopefully, many have learned or gone to school on these mistakes and are making the right business decisions to run profitable operations while bringing their subscribers good value. We’ll likely see some more casualties throughout 2008, and of course many more new MVNOs taking their shot at becoming the next industry darling. SM: Any new expected trends for 2008? MF: Nothing out of the ordinary, but I would not be surprised to see some SMS text message bundles being offered. Most of the prepaid carriers are charging $.10 per minute or more for a text message and I think they are really missing the boat and opportunity. Why the carriers don’t offer unlimited text messages for $20 a month does not make sense. I think it would be a great way to increase revenue, especially when you look at the youth/ teenager market that predominantly uses SMS text as their means of communication. SM: Anything new and exciting on the horizon at PrepaidWireless.com? MF: Funny you should ask, we just launched our “Airtime Refill by Text Message” refill program and are doing some test with some service provider partners. Their customers can now order an airtime refill right from their handset and get their PIN in a matter of seconds. Within the next few weeks we’ll be able to do automatic posting of the PIN to the carrier’s backend, so the minutes are placed on the customers phone in real-time. Doesn’t get any better than that when it comes to the buying experience in prepaid and all of our service provider partners are very excited about the program. Mark Flanagan is CEO of PrepaidWireless.com. Visit PrepaidWireless.com online at www.PrepaidWireless.com. “Service providers have to bring convenience and alternative methods to their subscribers to help reduce churn and increase average revenue per user.” Phones priced at $50 or higher do not sell even near as well as those priced at $39 and lower. For instance, take a look at the Motorola C139. That is a very basic phone, but one of the best selling phones for both AT&T GoPhone and Tracfone, perhaps the two largest prepaid service providers in the US today. On the other hand, we have a growing number of carriers and MVNOs (Mobile Virtual Network Operators, who bundle and resell minutes from the major carriers) such as Airlink Mobile, Boost Mobile, Movida Cellular, Tracfone and Virgin Mobile that are subsidizing their phone prices to maintain a retail price point under $40. SM: What about refurbished phones? MF: Refurbished phones are a popular yet tricky niche market. Companies such as Airvoice Wireless, Page Plus Cellular, Telrite Wireless and Total Call Mobile have managed to put out good refurbished phone products. I think that statement can be partly measured by the strong growing number of subscribers these service providers have on their network today. With a quality refurbished product at the right price, a service provider can be very successful. But if you have poor handset quality control, selling refurbished handsets can be the kiss of death. SM: Getting back to PrepaidWireless.com, why would a customer buy airtime minutes from your website instead of the carriers direct? MF: That is certainly an option with some carriers, but selling online and managing fraud is a business in itself that needs a lot of attention and business processes to manage a successful program online. Many carriers/service providers turn to us and other third party vendors to mange this aspect of their business. So in essence, when you go to the service provider’s website y http://www.PrepaidWireless.com http://www.PrepaidWireless.com http://www.PrepaidWireless.com http://www.prepaidphone.com http://www.PrepaidWireless.com http://www.PrepaidWireless.com http://www.PrepaidWireless.com http://www.PrepaidWireless.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - February 15, 2008

The Prepaid Press - February 2008 Beachfront Property for Sale Cardholder Facing Systems Contents The Retske Report: Getting the Word Out 5 Minutes With Mark Flanagan, CEO of PrepaidWireless.com Regulatory Rundown: Mid-Winter Update 2008 Prepaid Wireless Handsets Consumer’s Union Raps Wireless Industry Prepaid Reviews Launches Canadian Website Maginpins and TúYo Mobile Form Alliance Prepaid Wireless in Brief Boost Mobile Introduces New $1/Day Chat Plan Mobile Voice to Overtake Fixed in Europe Prepaid Wireless Roundup Another Kind of Prepaid Calling Spot Rates VSNL Wins ATLANTIC-ACM Award The Legal Line Calling Cards in Brief Sapotek Partners with DigiLinea Pactolus Goes Live at Cable MSO Low-Income Market Initiatives to Drive Mobile Banking Payments in Brief Monitise Americas Expands Payments Network Charge Anywhere Mobile POS Wins Award Hypercom Introduces System for Small Merchants TIO Networks Announces TIO Prepaid MasterCard NPBCA Makes Leadership Change A Walk Down the Aisle Branding Your Retail Store Retailers Welcome Senate Approval of Stimulus Bill NRF Forecasts 3.5 Percent Growth in Retail Sales Cyphermint Teams With DHL Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - February 15, 2008

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