Prepaid Mobile services.

The way we view Prepaid Mobile Services

Since the very concept of prepaid mobile payment was introduced to the world in 1993 by Andrew Wise from Banana Cellular in Arizona, USA – the world of the cellular phone has never been the same again.
The prepaid cell phone industry is one of the biggest industries on planet earth.
But before we go on to further explain Prepaid cell phone and or mobile phones, let's take a step back.
The normal way of owning and operating a cell phone before prepaid was through a post paid subscription. The offer to consumers – which is still applicable today, is an agreement by the customer to enter a 3 year contract (on average) with a network – locking the customer into a monthly fee. The networks love post paid – it's understandable – annuity income is one of the best incomes; additionally it allows the networks to project forward revenue. There is nothing wrong with post paid – it works for a lot of people
One of the main challenges of the post paid only era for a vast amount of potential customers – was credit checking. To qualify for a post paid cell phone contract a customer had to get approved through a credit check. A large amount of potential customers were alienated – more so in the developing world – where population growth is exploding.
So looking back to 1993 – what Andrew Wise did simply speaking – by introducing a new way for potential customers to consume the use of mobile air time through a new billing mechanism called prepaid, was to make cell phones and all their benefits accessible to the masses.
Since then, the market has matured incredibly to the point that now almost every major carrier in every cell enabled country offers prepaid packages. Virgin Mobile launched with a unique strategy whereby it only offered prepaid cell phone offerings to the market place. They have since introduced post paid packages.
The benefits are immense. The ability to get a phone has become much easier. There are many different packages to choose from. The amount of airtime minutes – time restrictions- number of sms text messages are all input factors and affect the cost of a prepaid offer.
Recharging of airtime became an immediate need for prepaid users. Once the minutes had been consumed – users were desperate to recharge their prepaid cell phones to continue talking. Initially the networks offered prepaid recharge cards which are available in many denominations. Retailers stock these physical cards and when a customer purchases a card – that customer must make contact with the network to activate the prepaid credit. This created very big sales opportunities for many retailers. Over and above offering recharge minutes – retailers started selling prepaid starter packs which simply speaking are a cell phone, a sim card and prepaid airtime.
When virtual airtime recharge was introduced it created efficiencies for retailers in a way that they could not imagine. Instead of now having to carry a full line of prepaid airtime cards, recharge terminals were installed into their stores and retailers are now able to match demand vs supply in a low risk, flexible manner. Through an internet connection – airtime can be sold to customers when they require it – which means not holding any stock for the retailers. This model is offered to retailers by airtime aggregators who have deals with the networks to resell the airtime on their behalf.
Although it seems like prepaid cell phones have been around for a long time – it has just been 14 years.
The market is growing especially with the youth segment and in developing countries.
Communication has become more accessible, it's become easier to talk.