As part of my post conference ritual I take a long run the morning of my return home and I use my time on the trail to sort out what I saw, the conversations I had, and the presentations I sat through.
Following this year’s Prepaid Press Expo I have come to three simple conclusions:
1. The prepaid calling card industry is consolidating and brands are more important than ever.
2. The mobile industry, specifically prepaid mobile, is growing and evolving as a product.
3. The prepaid calling card industry must leverage the mobile industry to succeed in the future.
The prepaid mobile industry has gone through some significant and positive changes in 2009. Let me set the stage for a moment about the prepaid mobile space before I go any further.
The commonly found post-paid billing model that we embrace in the U.S. is by no means the norm when we look at the rest of the world. In the U.S., prepaid mobile subscriptions account for less than 20% of all mobile subscriptions. Conversely, prepaid represents more than 80% of all mobile subscriptions worldwide.
There is a shift occurring in the U.S. from the traditional post-paid billing model to prepaid. In Q1 of 2009, for the first time ever, the number of new prepaid mobile subscriptions exceeded the number of new post-paid mobile subscriptions. Why is causing this shift to occur in the U.S.?
1. It is evident that the economic crisis has enticed many people, especially those who were recently laid off from work, to make the move to prepaid mobile versus signing a 2-year long post-paid contract with a carrier.
2. Earlier this year, mobile carriers such as Boost kicked off an unlimited nationwide calling plan for as low as $50.00 a month. Prepaid carriers such as Cricket, MetroPCS, T-Mobile, etc. quickly followed and now you can find a very nice unlimited nationwide calling plan (which also includes texting and data) for as low as $40.00 a month.
3. The quality of mobile phones has improved significantly. In the past, prepaid mobile providers offered low-end, even refurbished phones that had very little appeal and very few features. Now, you can find very feature rich smart phones with high-end features such as e-mail, picture phones, data plans, blue-tooth, Wi-Fi, etc.
The demographics of the prepaid mobile market are rapidly changing in the U.S. From the beginning, prepaid mobile plans held a negative connotation – ie: they appealed to the “lower class”. This same undertone is not found in the international market. As a result of the slower economic times, we are seeing this negative implication being detached in the U.S. & rather than consumers viewing prepaid mobile as the lower class solution, prepaid has become the smart choice for the value conscious mobile consumer.
With 90% of today’s U.S. population having mobile subscriptions and by 2014 it’s projected that over 100% of the U.S. population will have mobile subscriptions, we must give this industry more attention than ever before. To highlight this point even further, in an Economist article titled “Cutting the cord” it was noted that one in every four households in the U.S. is already a cell phone only (CPO) household. The article goes on to suggest that if the current trend to adopt mobile services continues, that by 2025, landlines at home will no longer exist.
Realizing that mobile services are now ubiquitous to everyone, how do those in the prepaid calling card space leverage the growth in mobile?
1. Market your products as extensions to mobile – Highlight how easy your product is to use via mobile phones.
2. Incorporate features such as PIN-less Dialing, Auto Recharge, and Speed Dial. Remind yourselves that the mobile subscriber wants advanced and efficient solutions.
3. Take advantage of direct marketing to the consumer by sending text messages to their phone announcing new features, new rates, and other special offerings on their prepaid long distance product.
4. Deliver “clean”/reputable prepaid calling card products. The mobile subscriber expects to receive what is printed on the package.
Given our current environment, it is paramount that we focus our energies where the mobile industry is shifting. The prepaid calling card industry is consolidating and brands are more important than ever. The mobile industry, specifically prepaid mobile, is growing and evolving as a product. And most importantly, the prepaid calling card industry must leverage the mobile industry to succeed in the future.
VP Business Development
NetworkIP & Jaduka