Over 150 million US consumers carry a cell phone, and by 2007, the Yankee Group expects a near-doubling in the number of subscribers to prepaid and new ‘hybrid’ services, which include postpaid features such as credit card payment.
Jun 22 2004 : If carriers successfully market prepaid products to teens and consumers with poor credit rating through 2006, new prepaid users could contribute a further USD 6.3 billion in revenue to the total wireless market, according to Morgan Stanley Equity Research. By 2006, Morgan Stanley predicts prepaid wireless users to account for up to 20 per cent of all subscribers, up from 8 per cent in 2003, while Yankee expects the prepaid market to almost double to USD 6.8 billion.
With 49 per cent of US wireless subscribers in 2003 citing the ability to manage costs as a primary reason for choosing a prepaid program, Yankee analyst Adam Guy says prepaid is not just for credit-challenged consumers, but also for the potentially lucrative youth market. The flexibility of not having a postpaid contract, for instance, is known to be a major factor in the appeal of prepaid wireless to US teenagers. On this basis, Yankee Group predicts the US prepaid subscriber base to grow by 70 per cent to 24.8 million customers by end-2007, while anticipating that the postpaid market will grow by 5 per cent, to 150 million.
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