The domestic prepaid market is set for explosive growth during the next five years as the industry continues to refine offerings based on so-called hybrid plans and increasingly popular mobile virtual network operators, according to a study from research and consulting firm Atlantic-ACM.
The report, “Prepaid Insights 2005-2009: Sizing up Markets, Opportunities and Players,” claims that prepaid customers will grow at a compound annual growth rate in excess of 20 percent. Atlantic-ACM said that it expects much of that growth to come from hybrid plans that often rely on automatic replenishment using credit cards or checking accounts for monthly service, and will account for more than two-thirds of industry revenues by 2009.
The report also touted the strong customer growth and revenue-generating capabilities of MVNOs. Atlantic-ACM noted that the segment’s 11.1 million customers at the end of 2004 equaled the prepaid customer base of traditional wireless carriers, and that MVNOs will serve 7.7 million more prepaid subscribers than traditional carriers by the end of this year. The report also predicts that MVNOs will account for nearly four of every five prepaid wireless subscribers by the end of 2009.
“We’re really at the breakaway point for MVNOs right now,” said Fedor Smith, Atlantic-ACM’s prepaid sector analyst. “The prepaid industry has historically been the domain of niche marketers that have the ability to meet the needs of very specific types of customers. History is repeating itself as niche-oriented MVNOs are overtaking traditional providers for the for the dominate industry position.”
