Telcordia highlights need for improved service delivery in prepaid

Ovum numbers cited in Telcordia’s recent announcement about its service delivery and charging solutions reflect that the prepaid segment in the U.S. wireless market grew 17 percent in 4Q09 to 54.4 million subscribers. Ovum expects that by 2014, 24% of all U.S. wireless connections will be prepaid.

For that reason, service delivery will continue to become an increasing focus for operators that consider prepaid an important part of ARPU growth. As indicated in last month’s Ovum/Amdocs survey, prepaid will grow from 75% of total connections worldwide in 2010 to 77% by 2015, meaning services traditionally offered to postpaid customers will now be brought into the prepaid realm.

“Carriers have to look at the market differently and customize solutions to give subscribers the flexibility to use their higher-quality handsets to their full potential. As more handsets are put on prepaid plans, capturing and retention of subscribers will depend on the speed with which carriers offer new plans,” said Cathy McMahon, Service Delivery Solutions, Telcordia, which has worked with Sprint to bolster its contract-free service plans that have succeeded to win over users, and has focused on prepaid with carriers in growing markets like India and Brazil.

According to consumer reports on the subject, Sprint’s focus on service delivery has helped it move ahead of AT&T and some other carriers in terms of customer satisfaction. That is something McMahon attributes to enhanced flexibility and features that are rolled out quickly according to customer needs. “Operators can no longer take a year to offer new services—whether all you can eat, or post-paid plans with prepaid aspects such as no contracts, or traditional pay-as-you-go models.”

She contends that customization and flexibility will be the name of the game for personalization and customer satisfaction. “That means operators will have to be able to tailor session control, rating, charging, usage and policy rules for every customer, every call and every transaction or interaction,” said McMahon.

Sprint competitors are taking note and making moves to expedite delivery of new and compelling prepaid services. For example, Verizon—to stem prepaid losses early this year—launched prepaid data plans for smartphone subscribers, leveraging higher demand by reducing the base rate of its unlimited prepaid voice plan to $1.99 per day (down from $3.99). The company also added Skype mobile support to some of its prepaid feature phones.

Whether that will be enough to keep up with Sprint, whose Virgin Mobile property is gaining momentum with “Beyond Talk,”unlimited messaging, data, e-mail and web browsing remains to be seen. Sprint’s partnership with Wal-Mart will mean more inexpensive, prepaid offerings will come to wider swaths of the market.

As competition heats up, so too will the need for real-time charging and policy—both of which will become more crucial so for reinforcement of preferences, restrictions and entitlements, which have to be integrated into more sophisticated offerings.

“The days of the one-size-fits-all billing are gone; you have to tailor plans and new services in real time to tailor promotions, features, rate plans and cross-product bundles. Then you can act faster to keep your subscribers happier and more loyal than ever,” added McMahon.