Feeds

Pre-paid users to fuel m-commerce

Critical to success

  • alert
  • submit to reddit

Designing a Defense for Mobile Applications

Pre-paid mobile phone users will be critical to the success of the emerging m-commerce mobile data market, according to a new report by Analysys, Ciaran Buckley writes.

The report, "Enabling Prepaid Mobile Content and Data Services: Strategies for Operators and Vendors," argues that the 170 million customers currently on pre-paid packages across Western Europe are in danger of being ignored by mobile operators. Despite the dominance of pre-paid users in terms of customer numbers, most operators have only made advanced services, such as multimedia messaging and entertainment services, available to their contract customers.

"Pre-paid customers already account for 63 percent of active mobile users in Western Europe, and despite operator efforts to convert them to contract subscriptions [they] will remain a substantial segment of the mobile market for at least the next five years," said lead author Emily Turnbull.

GPRS and UMTS are new-generation mobile phone standards that allow greater data volumes through the mobile networks. These standards are expected to popularise mobile commerce by facilitating the sale of content through mobile networks.

A 2001 report by Frost and Sullivan found that although up to 80 percent of some mobile phone operators' customers are pre-paid, they generate only 20 percent of revenues. For this reason, many operators have attempted to nudge pre-paid users into contracts by reducing subsidies on their pre-paid phones, by charging extra for calls and by raising the minimum credit threshold for pre-paid customers.

Speaking to ElectricNews.Net, Turnbull warned that attempts by operators to force pre-paid customers into contracts by excluding them from next-generation phone services may make customers take their business elsewhere, to operators who are prepared to offer parity of service.

If operators make next-generation services available to pre-paid customers by early 2003, Analysys estimates that residential pre-paid users could generate EUR16 billion in GPRS and UMTS non-voice service revenue by 2007. Because many young people are pre-paid customers, they could also be early adopters of shopping by mobile phone, which would generate significant revenues for the operators, as well as the content providers.

"My feeling is that operators need to launch new services simultaneously for pre-paid and billing customers," said Jack McDonnell, director of marketing and business development at Altamedius, a company whose software powers micro-payment services for operators like Vodafone. "That's the ideal. I don't know that it's technically possible yet."

McDonnell believes that the technical problems lie in the limitations of operators' billing systems, which currently use complicated rating rules to facilitate content charges that are bundled with airtime charges. Under the current technology, content charges can only be charged to the user's pre-paid or post-paid mobile phone account.

McDonnell believes that in the long-term, operators will have to allow content providers to set their own charges for content, while charging separately for airtime. Operators are also expected to give the option to have content billed either to the consumer's phone bill or to a credit card.

© ENN. All rights reserved.

HP ProLiant Gen8: Integrated lifecycle automation

More from The Register

next story
Scotland's BIG question: Will independence cost me my broadband?
They can take our lives, but they'll never take our SPECTRUM
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Bring back error correction, say Danish 'net boffins
We don't need no steenkin' TCP/IP retransmission and the congestion it causes
NBN Co adds apartments to FTTP rollout
Commercial trial locations to go live in September
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
Telstra to KILL 2G network by end of 2016
GSM now stands for Grave-Seeking-Mobile network
Seeking LTE expert to insert small cells into BT customers' places
Is this the first step to a FON-a-like 4G network?
What FTC lawsuit? T-Mobile US touts 10GB, $100 family-of-4 plan
Folks 'could use that money for more important things' says CEO Legere
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.