Wireless operators typically see prepaid subscribers as a secondary group in terms of average revenue per user (ARPU), but many, like Malaysian operator, DiGi, are serving pre- and postpaid subscribers on equal terms. Prepaid users comprise about 70 per cent of the total mobile subscriber base in Malaysia, which now totals just under 10 million, according to Frost & Sullivan. DiGi reports prepaid subscribers to comprise just over 80 per cent of its two million user base, but emphasizes that postpaid customers are still important to its business, potentially as a way to lure new subscribers from competing operators.
Frost & Sullivan analyst, June Liang Pui San, notes a slight slowing of growth in Malaysia’s prepaid cellular market, but sees some room for growth. By 2006, for instance, San expects prepaid cellular usage to reach 55 per cent, as “there could be a proportion of consumers who might need two lines to support their multiple [handheld] devices”. This slight growth will be driven by prepaid usage, San says, but operators must not rely on prepaid alone to boost their revenues, as “prepaid users don’t pay the monthly access, contribute low ARPU and are volatile”, San concludes.
While prepaid cellular services tend to be driven by the convenience of a non-credit system, Visa has teamed with DiGi to enable its prepaid subscribers to automatically reload their airtime using their Visa credit cards. Enrolling for the automatic prepaid top-up service, which is marketed as the first in Malaysia, allows Visa cardholders to reload their prepaid accounts, both for themselves, and for their families. DiGi says it is seeking to expand its prepaid reload options by introducing a new Beyond Prepaid service that automatically adjusts tariffs, and by offering a Beyond Prepaid SIM pack that includes automatic reloads.