About three-quarters of service providers plan to expand their prepaid offerings to include services that are traditionally offered only to post-paid customers, according to research conducted by Ovum for Admocs.
However, existing BSS/OSS systems cannot support the shift in strategies and significant changes in are required. Of those polled, 47% said their prepaid strategy would require moderate to large changes to their BSS/OSS systems to address technical challenges. Inability of their back-office systems to support fast time to market of new offerings was the technical challenge cited most frequently by respondents.
In addition, service providers are already making changes to BSS/OSS systems, with two-thirds of respondents implementing changes to accommodate new prepaid service capabilities while the rest are planning to do so within the next two years. About 61% have deployed convergent charging systems or are planning to do so.
"Greater availability of high-end devices such as smartphones, along with services like messaging, mobile broadband and applications, are increasing customer expectations from prepaid wireless services," said Ovum analyst Sara Kaufman.
Ovum forecasts that prepaid will grow from 75% of total connections worldwide in 2010 to 77% by 2015.
"Service providers understand that the prepaid wireless strategies they adopt today will have a major impact on future profitability," Kaufman said.
The research found that 47% of respondents already offer high-demand consumer devices, such as smartphones and other mobile broadband devices, to prepaid customers.
Hybrid approach
There is also a move to offer hybrid payment models, with 63% of respondents who are mainly North American and European service providers saying they were already offering hybrid (a mixture of prepaid and post-paid) payment models to customers such as prepaid monthly, no contract plans. Providing more service and payment choices and increasing customer loyalty are driving service providers' move toward hybrid service offerings. Responding to customer desire to control their spending and improving provider ability to assure their revenues (by moving pay-as-you-go prepaid customers to monthly plans, for example) are additional strong motivators for adopting hybrid service models.
"To remain competitive, service providers must go to market quickly with new prepaid and hybrid services, and need a charging environment that can provide this required agility and flexibility," said Erwann Thomassain, Amdocs' marketing director for Asia Pacific. "Service providers that can offer customers a broader choice of services will drive customers to use more services, increasing customer stickiness and spend."
For example, enhancing prepaid subscriber loyalty is a major business focus for Philippine-based Globe Telecom. Globe wanted increased business flexibility, particularly by reducing time to market for new services. But a complex, siloed service architecture was hindering the realization of these goals and was also expensive to operate and maintain.
Globe tapped Amdocs for a strategic transformation of its service layer to a common horizontal architecture. "We partnered with Amdocs to help us gain the agility to grab market share by attracting and retaining prepaid subscribers," said Mario Domingo, head of product design and service creation at Globe.