The Prepaid Press - January 2009 - (Page 10)

PREPAID TELECOM Dec. 2008 / Jan. 2009 - 10 Prepaid Wireless Providers Capitalize on Economic Downturn Discuss Key Strategies for 2009 by Ingrid Ricks prepaid wireless offerings, providers say a big reason prepaid wireless is now such a viable alternative is because of the closing gap between prepaid and post paid offerings. Prepaid was once considered the ugly stepchild of wireless service and seen as the choice of last resort for those who couldn’t qualify for postpaid service. But a gradual shift has taken place over the past 24 months that has virtually leveled the playing field between prepaid and post paid services, making prepaid an attractive choice — even for people with excellent credit. “The fact is that over the last couple of years, we have closed or eliminated the gap in terms of what one could get with contract vs. without one,” says Wallace. “We have been adding features such as unlimited text messaging and roll over minutes so the differences are no longer that keen. As such, we are finding more and more people who say, ‘I don’t need to sign a contract’.” Along with the new features and better handsets being offered by prepaid wireless providers, the price points have also come down considerably on prepaid wireless – making per minute costs comparable to post paid. And to appeal to post paid consumers who are used to a monthly plan, the current trend among prepaid wireless “By giving people 300 minutes for $20 we are offering them a lot of value and we are seeing a lot people buying our service even if they do have credit,” notes Movida Cellular CEO Paul Greene. “Why spend $60 a month if you only need 150 minutes?” “We are going with ease and simplicity,” he adds, voicing the sentiment of others. “It’s hard enough to get a customer and keep them. Why confuse them while we are at it? We want to make it easy all the way down the line – including for the people who are selling it.” about 34 percent of the people survey knew this to be a myth. (see full article/survey findings on page 15) The focus on consumer education and awareness is paramount for Pete Grubb, VP of Sales and Marketing for O2 Wireless. His company recently teamed with Best Buy Mobile to deliver a Universal SIMCard solution that makes it seamless for many postpaid consum- It’s hard to find a silver lining in the severe economic downturn that has gripped the United States and world as a whole. Businesses in every sector have taken a hit, and the prepaid industry – while faring better than others – has by no means been immune. Yet despite the ongoing recession, the market saturation of cell phones in general, and the overall consolidation of the MVNO space, prepaid wireless providers say they are optimistic about the year ahead. They believe that the current credit crunch and belt tightening among consumers will lead to an influx of new prepaid wireless customers through 2009 and beyond, and the race is on to woo consumers their way. “By no means are we sitting here rubbing our hands together with glee,” says Jeff Auman, VP of Sales & Distribution for Boost Mobile. “We are feeling the pinch like everyone else, but we believe the current economic environment provides us with a great opportunity to go out and show people how they can get better value for their money. The bottom line is that people will get rid of a lot of things before they get rid of their phone, and if we can help customers manage their wireless expenses and make it more affordable, this is a perfect time for us.” “We are in this weird seesaw situation where, on the one side, the economy certainly impacts us negatively because we serve mid to lower income people and if anyone has been hit, it is them,” notes Jayne Wallace, who heads corporate communications for Virgin Mobile USA. “On the other side is simply the obvious, that prepaid has always been an alternative for people without credit cards. In that sense, we do expect to see some benefit from people who were on postpaid but can’t pass the credit checks so they have no alternative. Wireless is no longer a luxury. It has become a must have in most cases.” Education Still Needed Despite the current market opportunity and vast improvements to prepaid wireless offerings, providers acknowledge that they need to work with retailers to educate consumers about the benefits of prepaid and the ease of transferring from a post paid service —a point that was brought home in a recent national opinion survey conducted by the New Millennium Research Council, a Washington D.C.-based think tank that focuses on the fields of telecommunications and technology. While the survey found that 44 percent of Americans speak for 200 minutes a month or less on their cell phone in an average month – making them ideal candidates for prepaid wireless service – it found that many people are hesitant to change from post paid to prepaid because of the lack of awareness about the end of cell phone contract periods and concern about penalties. More than half of Americans surveyed believed that switching to a prepaid cell phone is expensive because contract-based or post paid cell phone customers are always under contract and have to pay a cancellation fee whenever they switch carriers. The study found that only A gradual shift has taken place over the past 24 months that has virtually leveled the playing field between prepaid and post paid services, making prepaid an attractive choice — even for people with excellent credit. ers to switch to their prepaid service, and he has launched both online and offline marketing initiatives to effectively communicate this message to consumers. “I think there is a great opportunity here, but it’s going to be up to companies like ours to capitalize on it by simplifying our service offering and making it crystal clear to consumers,” says Grubb. “People don’t want to have to read a lot of literature to know what they are getting. We need to offer a predictable, flexible cell phone plan that meets their needs. “Ultimately I look at the prepaid space and prepaid mobile, in particular, as the next generation of open networking – which implies the ability to choose your service and bring your phone number with you.” Prepaid Telecom in Brief NetOps, a privately-run, white-labeled network operations support company In New York City and Chicago, has scaled up its network operations support services. NetOps says large-network businesses and carriers are choosing to outsource these services to companies such as NetOps, in order to reduce IT costs and to ensure on-hand, self-directed expertise. NetOps technicians are available on-site, or at traditional data center and colocation facilities in New York City and Chicago, providing another layer of direct and/or emergency network operations support. NetOps professionals act as an additional arm for their clients“ in-house support team, even if the business or carrier is headquartered overseas. NetOps - www.networkoperations.ws “The bottom line is that people will get rid of a lot of things before they get rid of their phone, and if we can help customers manage their wireless expenses and make it more affordable, this is a perfect time for us.” providers is to offer simplified, easy-to-understand prepaid packaged plans that mirror post paid plans. Virgin Mobile USA recently added several monthly hybrid plans to its mix – ranging from a $24.99 plan that includes 200 anytime minutes and 500 nights and weekend minutes, to a $79.99 plan that offers complete unlimited calling. The company also offers add on text messaging or data packages starting as low as $5 a month. Boost now offers consumers three basic prepaid plans: a by the minute, by the day, or by the month plan. Its $1 a Day Chat Plan gives consumers unlimited nights and weekend calling, Unlimited Mobile-to-Mobile calling (for calls between Boost, Sprint and Nextel subscribers nationwide), and unlimited text. Movida Cellular is also getting in on the bundled packages act, currently spotlighting its 300 minutes a month plan, which sells for $20. O2 Wireless, a nationwide provider of prepaid cellular service, has inked a deal with Best Buy to offer the new O2 Wireless Universal SIMCard and O2 Wireless airtime recharge cards in 1,150 Best Buy, Best Buy Mobile stores, Best Buy kiosks and online at BestBuy.com. With this new O2 Wireless service, consumers can purchase as much or as little airtime they want (recharge cards start at $10 for basic service). The O2 Wireless Service comes with 50 free minutes (added upon activation) and requires no longterm contracts. This new O2 Wireless service also allows consumers to recycle their old GSM phones. As part of the recycling initiative, the O2 Wireless Universal SIMCard is packaged in an eco-friendly, recyclable “Green Box” which reminds consumers to “Consider the environment. Please recycle this package.” O2 Wireless Service www.O2WirelessNow.com Leveling the Post Paid VS Prepaid Playing Field Though an increase in bad credit among consumers is certainly heightening the demand for TelcoBridges Inc., a hardware and software supplier for telecom solution developers, has named Danny Paul Blouin its new Vice President of Marketing. Blouin comes to TelcoBridges from TELUS, a large telecommunications company in Canada, where he held a variety of sales and marketing positions since 2003, most recently serving as Product Marketing Director. In his new role at TelcoBridges, Blouin’s charter will be to build TelcoBridges’ brand on a global scale, which will include expanding the company’s product leadership position with telecom solutions providers and operators. He will also lead marketing efforts that support TelcoBridges expansion into new industry segments and will oversee the development of new programs designed to market the activities of TelcoBridges partners. TelcoBridges - www.telcobridges.com Local.com Corporation (NASDAQ:LOCM), a local directory service and network, and Virgin http://www.BestBuy.com http://www.networkoperations.ws http://www.O2WirelessNow.com http://www.Local.com http://www.Local.com http://www.local.com http://www.virginmobileusa.com http://www.telcobridges.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - January 2009

The Prepaid Press - January 2009 Economic Crisis Sharpens Focus on Stored Value Cards Industry Veterans Weigh In on 2009 Prepaid Opportunities Contents From the Publisher: Ready for Change? The Prepaid Press Thanks its Editorial Advisory Board Regulatory Rundown 2008 Milestones Prepaid Wireless Providers Capitalize on Economic Downturn Prepaid Telecom in Brief APCC Services Settles With Calling Card Providers Boost Mobile Offers All-in-One Prepaid Package SonarTel Prepaid Customers Can Use Accounts in More Countries BillSoft Selected by Integra Telecom Pingo Adds PC “SoftPhone” Calling kajeet, the Cell Phone Service for Kids, Wins Award Prepaid Wireless Roundup The State of Prepaid Technology: Wholesalers & White Label Services New Millennium Releases Wireless Survey Results 5 Minutes With Paul Amick, EVP & Co-Founder, PhoenixSoft Millions Could Cut Cell Phone Bills in Half New Virgin Poll Reveals Buying Habits The Legal Line BioPay Expands Offering for Underbanked IDT to Sell European Prepaid Payment Business iPayStation Launches Network for Distributor Stored Value Solutions Appoints New VP Cellular South Offers Mobile Banking for Regions Bank Javelin Research: Processor Important in Prepaid MiCash Announces New Prepaid Debit Card Monitise and eCommLink Partner Platamovil Selects PhoenixSoft’s Cirrus Softswitch Prepaid Market Forecasts to 2011 Payments & Processing in Brief Prepaid 101: Gift Cards SCA’s PrizeSuite Enables Promotions MT&L Offers Gift Card Removal and Destruction Heartland Payment Systems Acquires Chockstone Amex and Rymax Offer Gift Cards TransCard Announces Corporate Gift Card Website Gift Cards & Promotions in Brief Our Advertisers Contact Us

The Prepaid Press - January 2009

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