Research Notes

With the right analysis and strategy, mobile operators can easily improve margins on their prepaid business by 2-5%

For the past two years, Strand Consult has conducted a large global research project where we have been examining and analysing the prepaid mobile telephony market across a number of continents. Our research shows that many operators believe that the prepaid market is developing negatively and are choosing to move focus away from prepaid and instead over to postpaid.

Last year we published the research note in which we took a close look at the prepaid market and how it is developing. Trend number 1 is not a regional trend, but a global trend – operators are trying to solve the challenges they are facing on how the prepaid market is developing, by trying to move customers over to postpaid products.

If you had as much knowledge about this market as we have, you would agree that this decision is wrong. We do not believe that operators can simply convert all their customers to postpaid products. If our assumption is correct, then the challenges that operators are facing will not be eliminated by trying to use that strategy. On the contrary, we believe that this strategy will make the operators’ problems even more visible within this customer segment.

In practice there is no doubt that there are solutions to many of the challenges that operators are currently struggling with on the prepaid market. We believe that there are tools available today that operators can use and that have a documented effect on:

1) Significantly reducing top-up costs
2) Significantly reducing churn
3) Changing customers’ traffic patterns
4) Increasing prepaid customers ARPU

The easiest solution to reducing operators’ top up costs is by discontinuing top-up scratchcards and instead focusing solely on online and electronic top-up solutions. Many of the operators we have met can easily improve their margin by 2-5 % by doing this – and all without having to acquire more customers or increase their turnover.

You can read more about why scratchcards should be scrapped here:

At the workshops that we have held for a number of operators around the world over the past year, we have shown how the prepaid market will develop and put forward a number of suggestions on how operators can reduce their costs, increase their turnover and reduce churn. Now the question is which operators will benefit from the lessons already learned by other operators, by copying their strategy and using their knowledge to create additional value for their shareholders?

Many of the initiatives we are suggesting, are initiatives that have already been implemented and are functioning on a number of markets. We know for a fact that many operators have already admitted that trying to change focus to postpaid is not solving their problems on the prepaid market.

If you would like to learn more about Strand Consult’s unique workshop concept about the prepaid market, please request more information here: Next Generation Prepaid We can very quickly create a customised workshop for you, that we guarantee will solve many of the challenges that you are currently facing.
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