SAN JOSE, Calif.-There is a large, untapped end-user market segment that is unwilling to pay the monthly bills associated with postpaid wireless service, but would use wireless service if given another viable option, according to strategic research from Frost & Sullivan.
The report, “U.S. Prepaid Wireless Service Markets,” estimates industry-generated prepaid revenues of $2.2 billion in 1999, and projects the prepaid market to reach $16.8 billion by 2006.
Frost & Sullivan said that in order to provide service to low-use and sporadic users, wireless carriers should provide plans that are flexible enough to accommodate patterns of use not serviced by current postpaid plans, including lengthening the expiration date of minutes, extending the expiration date of unused time to match newly purchased minutes and allowing customers to replenish minutes on their handsets.
“By offering this type of flexibility, the end user is more likely to pay a per-minute price premium over postpaid plans,” said Paul Waadevig, an analyst at Frost & Sullivan. “This would allow carriers to tap new markets, increase profit margins and ultimately migrate prepaid users to postpaid services as their use patterns change over time.”
