Research and Markets: Reassessing the Merits of Prepay-Postpay Migration Examines Some Examples of MNO Prepay to Postpay Migration Strategies and Explores the Profitability Issues
DUBLIN–(BUSINESS WIRE)– Research and Markets(http://www.researchandmarkets.com/research/f14f35/reassessing_the_me) has announced the addition of the “Reassessing the Merits of Prepay-Postpay Migration” report to their offering.
Since prepay mobile phone plans were introduced and facilitated massive expansion of mobile markets into consumer and lower value commercial sectors, MNOs have been looking for ways to migrate prepay customers to postpay contracts, where the perception is they will generate more ARPU and profits.
If prepay is a gateway to mobile use for new customers, then the more quickly the MNO can take a customer through that gateway, the greater the lifetime value of that customer. In developing markets, many new customers will be new to mobile and the gateway logic holds. Once the market reaches saturation levels, as in Europe, most customers totally new to mobile are likely to children that have only just attained the age where a phone (usually prepay) is purchased on their behalf. These customers already know all about mobile phones and are not using prepay as a gateway to a contract; they are prepay because of economic limitations. In such circumstances, is it worthwhile incentivising migration to postpay contracts, or can MNOs obtain more profit by continuing to serve them through prepay relationships, where the cost of provision is much lower?
In a mature market, there is also the possibility that certain customers may be encouraged to spend more through innovative prepay offers (such as prepay BlackBerry functionality) and so MNOs continuing to focus on migration may actually reduce the total potential revenue they may earn from the market. This report examines some examples of MNO prepay to postpay migration strategies and explores the profitability issues surrounding migration in markets where penetration has already exceeded 100% and concludes with some concrete recommendations for MNOs to help them make decisions about their own migration approach.
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