Prepaid Wireless Market

Description

The prepaid wireless market in the United States has experienced well-defined stages of growth, plateau, and renewed growth cycles.  Recently experiencing a growth plateau, prepaid wireless remains the service of choice for millions cellular customers in the United States. No longer carrying the sigma it once had as a service mostly for the credit-challenged, a large number of customers choose prepaid over post-paid.

The reasons are many and varied including lower costs for many of the same features and benefits as post-paid plans such as smartphones and advanced feature/functionality. It also anticipated that prepay wireless will once again achieve a substantive growth phase due to a few important factors evaluated in this report such as increasing need for anonymity for certain emerging services.

Prepaid wireless service providers in the United States have become increasingly competitive in recent years as they evolve offerings to be more on par with post-paid service features and plans. For example, Verizon Wireless now offers prepaid family plans, unlimited plans, and support for BYOD whereas this was not the case just a few years ago.

Mind Commerce anticipates continued evolution of prepaid wireless in general as part of a dominate trend towards prepay mobile services becoming increasingly more comparable with post-paid wireless. We also anticipate further M&A as market leaders consolidate their power base such as Verizon’s planned acquisition of TracFone Wireless. Whether they maintain a separate brand as they have done with Visible remains to be seen.

Prepaid Wireless Market Dynamics

The future of prepaid wireless communications will depend on more than just carrier-centric applications, communications, content, and commerce. For example, Mind Commerce sees prepaid as an important aspect of many next-generation services that are provided by a variety of third-party service companies that do not wish to offer a postpaid option as it would typically rely upon wireless carrier billing via prepay.

Growth in prepaid wireless service will also depend on the extent to which next-generation services such as virtual reality are generally supported on a pre-pay basis. This is to say that prepaid customers must have access to wireless data plans that put them on par with postpaid in terms of both bandwidth and low-latency required for acceptable end-user quality of experience.

While many emerging applications will be offered by Over-the-Top (OTT) service providers, we strongly recommend that MNOs offer their own branded/controlled Value-added Service (VAS) applications. The OTT application business model has caused data payload (e.g. apps that use data) to become increasingly more valuable to consumers than data itself, which is rapidly becoming a marginalized commodity. With this development, VAS applications become much more important to network operators.

With the ever-increasing commoditization of carrier core services (mostly voice and messaging), there will be a growing dependence on VAS applications for initially top-line revenue growth (as data growth tapers off and margins are squeezed) and then for margin growth as bearer services become a cost-plus commodity. Prepaid wireless service providers must also provide their own VAS apps to remain competitive, even if it necessitates them offering those apps on an OTT basis themselves.

Prepaid Wireless Market Tech Considerations

There are a few key core technologies required to support the prepaid wireless market. For example, there is a need to consider centralized call processing with intelligent network control versus a facilities-based approach. An excerpt from the report evaluating some of the call processing issues is provided below:

Prepaid customer requests for service must be processed in order to provide prepaid communications. Before requests for service can be processed, a request for prepaid service must first be detected and control must be handed over to the call processing function. Call control is the process of detecting a user request, relinquishing control to call processing, and managing the call in progress in terms of connection and service requests. Call control and call processing must work very closely together to manage operations of the prepaid system.

Prepaid Wireless Market Technology Considerations

In the first stage of a call to/from a prepaid user, software logic in the mobile switch detects a prepaid user origination attempt or an attempt by an outside caller to call the prepaid user. Upon this detection, call control is relinquished to the call processing function. The call processing function then either allows the call control function to set-up the call as normal or directs some other action such as playing of a low account balance announcement to the prepaid wireless customer.

In addition to call processing, the prepaid wireless market depends upon many other supporting technologies and solutions for data management, replenishment, CRM, and much more covered within the report. All of these considerations are very important for planning, implementing, and operating an efficient and effective prepaid wireless service.

Prepaid Wireless Market Report

This report evaluates the prepaid wireless market in the United States including major provider analysis and service assessment, technologies involved in prepaid service delivery, and assessment of the future of prepaid communications, content, and commerce.  The report also provides forecasts for 2021 through 2026.  The report also analyzes major MVNO companies and offerings. The report also provides a view into the future of prepaid wireless and market forecasts through 2026 including subscribers and Revenue by Voice vs. Data vs. VAS and by Connectivity Type.

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