Residential prepaid users to generate EUR16 billion in GPRS and UMTS non-voice revenue by 2007 if operators enable such prepaid services by early 2003.

Operators held back by existing prepaid systems in enabling flexible pricing and international roaming without risking revenue leakage.

Converged prepaid and postpaid systems one of many solutions available to operators to meet new system requirements.

The 170 million mobile phone customers currently on prepaid packages across Western Europe are key to generating increased revenue from data services, according to a new report released today by Analysys.

"Prepaid customers already account for 63% of active mobile users in Western Europe and, despite operator efforts to convert them to contract subscriptions, will remain a substantial segment of the mobile market for at least the next five years," says lead author Emily Turnbull.

The report, Enabling Prepaid Mobile Content and Data Services: strategies for operators and vendors, argues that prepaid customers are potentially valuable users of next-generation mobile data services. However, despite the dominance of prepaid users in terms of customer numbers, most operators have only made new GPRS services, such as multimedia messaging and entertainment services, available to their contract customers.

"Mobile operators have until now delayed launching the same content and data services to their prepaid customers, due to a mixture of commercial priorities and technical difficulties," says Turnbull. "It is now critical that operators turn their attention to providing common services to all their customers, if they are to succeed in tapping the full revenue potential of new technologies such as GPRS and UMTS."
If operators make next-generation services available to prepaid customers by early 2003, Analysys estimates that residential prepaid users could generate EUR16 billion in GPRS and UMTS non-voice service revenue by 2007.

According to Analysys, operators need to evaluate the capabilities of their existing prepaid charging systems, many of which are unequipped to deal with the range of new requirements that mobile data and content services bring.
These new requirements include the ability to charge according to different pricing models without risking revenue leakage, as well as enabling international GPRS roaming. Operators should also gain a better understanding of the usage patterns of their prepaid customers if they are to succeed in improving customer care for this important segment.

Operators can choose from different types of solution to meet these new requirements, including an upgrade to their existing prepaid platform or an adjunct system. Many vendors are marketing converged prepaid and postpaid billing and customer care systems that integrate the distinct systems that currently support prepaid and postpaid customers separately. Such systems enable operators to manage their entire customer base in a unified manner, and potentially provide long-term operational savings.
However, the report stresses that there is no single preferred solution to meet operator requirements. As Turnbull points out: "The most appropriate solution for a particular operator will depend on the status of its legacy systems, its immediate capital expenditure plans and its ongoing business priorities."