Gigaom trumps up prepaid again

For us folks in India, prepaid is an everyday reality. Not so in developed countries especially the US where 70% population uses postpaid contracts. Not many contracts are below 100 USD per month.  Compare this with ARPU of roughly USD 10 for postpaid Indian consumer .

The economic recession has forced US consumers to consider pay-as-you-go plans , also known as prepaid. Many biggies realized this and recently Sprint acquired Virgin Mobile USA, which is exclusively prepaid like Virgin Mobile India.

Not to be left behind, Walmart has joined the party and started selling Tracfone‘s prepaid plans in its nationwide stores. Tracfone is America’s biggest MVNO; it sells prepaid plans from multiple big carriers like AT&T and Verizon.   Boost Mobile is another serious prepaid player with a strong appeal to the youth segment.

Though US consumers are migrating towards prepaid, the prepaid market there is quite different from that in India.

1) In US, there are a lot of  ‘unlimited’  plans. For example at 50 USD, you could get unlimited calling ( with restrictions)  for 1 month. In India, there is no concept of unlimited calling yet.

2) Majority of prepaid plans in US come with bundled feature phones which are not necessarily latest in technology. In India, most people buy phones and plans separately.  Infact, Airtel and Vodafone tried to sell iPhone in India but it never took off. Folks would buy unlocked iPhones from the market and use their desired network.

3) Data is already big and part of prepaid plans in US,whereas Indian carriers are just now waking up to offer data plans. Like broadband internet, mobile data is also offered via unlimited plans in US. This has not yet happened in India, and something that 3G  should enable.

Read more from  gigaom here.