pre-paid data plan, prepaid, WiMAX, mobile broadband
Market research, financial analysis and consulting on wireless technologies and services
Pre-paid wireless services for voice and data are huge in most countries. Not so in the US. US cellular operators have been strangely resistant to the concept of pre-paid services. Not that they do not offer them, but they put a special effort in making them difficult to use and target them at the young market or to those without a good enough credit record to a contract plan. Not surprisingly, those who do not belong to these categories rarely choose pre-paid. In Europe, it is common to find professionals with a pre-paid account--or multiple ones. Have you ever spotted one in the US? Rover's Puck

The situation is slowly improving, but still pre-paid accounts for a small portion of revenues--and it is even more so for data plans. In many cases, what is passed for pre-paid is a no-contract account. Technically it is pre-paid in the sense that the subscriber pays for the service ahead of using it. But what has made pre-paid successful in many markets is more than the absence of a contract--it is the flexibility to use the service when needed, as needed. For data plans, this means using the data plan for one hour, one day, one month, or one year, or by the megabyte with an easy way to top-up the account.

Virgin does offer a pre-paid plan that is not monthly-based for 100MB/$10 but expires in 10 days. Verizon offers a prepaid plan for one day ($15) or a week ($30). While limited in flexibility, these are very welcome innovations that will attract not only infrequent users, but also those who are not ready to commit to the monthly plan.  

So it was interesting to hear the Clearwire was rolling out a pre-paid 
service, Rover. A pre-paid service is a good fit for Clearwire. As it expands its footprint and targets users that are new to mobile broadband, pre-paid can be an effective marketing tool. But more than that, it is a type of service that can be very valuable to subscribers--even those that can afford a pre-paid contract, but may not want or need one. Pre-paid delivers the flexibility that subscribers deserve--and that they were expecting from WiMAX.

All good then? Well, I was disappointed on two counts.

First Clearwire explicitly aim Rover at the 18-24 year-old crowd. While this is the user group is the most obvious target for pre-paid (in the US at least), why did Clearwire avoid a broader approach to pre-paid? Could a pre-paid-for-all offering have cannibalized the main Clear offer? Does Clearwire believe there is not sufficient demand outside the young market segment? Or does Clearwire think that there still too much of a negative stigma associated with the pre-paid market?

I was also disappointed to hear that Rover does not work with other Clear devices--or other WiMAX devices that use the same spectrum band. I that in the Rover will extend support to any WiMAX device that works in the 2.5 GHz band--just as you can use any GSM unlocked phone with any pre-paid SIM card wherever you go. Wasn't that the vision for WiMAX from the beginning?
Bookmark and Share

| | | | |