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Impact of Prepay Tariff Innovation

The focus of many Mobile Network Operators (MNOs) over the last two to three years - in terms of tariffs - has mostly been on migrating prepay customers to contracts where, it is perceived, the higher ARPUs typical postpay customers generate will deliver growth and EBITDA improvements. Outside those markets where prepay dominance drives MNO strategies, considerably less attention has been paid to developing optimum prepay tariffs that can deliver ARPU growth and improved retention within that portion of the customer base.

In markets where prepay dominates (notably Italy) greater levels of innovation in prepay tariffs have been demonstrated, as shown in the Maximising Wireless Profit (MWP) report The Success of 3G Services in Italy: A Case Study, March 2006. The lack of many of the mechanisms for retention automatically available for postpay customers (contract period and billing relationship, for example) means that the main challenge for the prepay segment of the market is retention rather than initial adoption. Despite this, surprisingly little attention has been paid by most MNOs to loyalty schemes for prepay customers. Prepay customer registration was examined in the MWP report Relationship Building Strategies for Prepay Customers (April 2006) and prepay upgrade and loyalty programs in the MWP report Prepay Upgrades in Europe (August 2006).

In this report, MMD examines the impact of prepay tariffs on total connections, prepay share of the total market, net additions, ARPU and effective price per minute in seven European markets which show great diversity in terms of maturity, competition levels, innovation, population density and regulatory background. The objective of this report is to identify and examine best practice and innovative prepay tariffs and loyalty programs to provide insight to MNOs and inform them in developing the optimum approach to their own customer base. We analyse and identify the two key critical success factors in developing a sustainable and profitable prepay offering. Using examples drawn from, for example, Sweden and Denmark where tariffs have been launched which have had a significant impact on adoptions, we recommend approaches to assist MNOs in optimising their approach to their own prepay customers.

Price: EUR 2,500.00 / GBP 2,000.00

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Table of Contents


1
Overview
1
2
Introduction
2
2.1
Scope
2
2.2
Prepay Tariffs Background
2
2.3
Loyalty Programs
3
2.4
Report Structure
3
3
European Prepay Market Overview
4
4
Analysis by market
7
4.1
Sweden
7
4.2
Norway
10
4.3
Denmark
12
4.4
Germany
16
4.5
United Kingdom
20
4.6
Ireland
24
4.7
Italy
27
4.7.1
Background
27
5
Conclusions
33
6
Recommendations
35
            
                

                
    
            
        
        
        
        
        
        
        

            

                

                

                

            
            

                

                     
                
                

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