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Report Reveals Potential For Additional $2B For Wireless Operators

16 November 1998

Strategy Analytics Report Reveals Potential For Additional $2 Billion For Wireless Operators

Calling Party Pays and Prepaid Present Lucrative Opportunities, Study Reveals

    BOSTON, Nov. 13 -- Calling Party Pays (CPP) could bring the
US wireless operators over $2B additional revenue per year.  A 1% reduction in
churn from implementing  CPP could save US operators $500M.  Prepaid services
could net approximately 40 million new users by 2003.
    The findings are published in a recent report "CPP & Prepaid Cellular
Market Opportunities", from Strategy Analytics Inc.'s Mobile Communications
Service North America.
    The report projects that CPP could produce an additional $2B annual
revenue for US Wireless operators by increasing outbound calls by 10%.
"There is clear evidence from international markets that CPP balances call
volume and has a net stimulative impact on overall wireless usage," commented
David Kerr, Director of Wireless Communications at Strategy Analytics.
    Over 45% of cellular users surveyed by Strategy Analytics are likely to
increase their incoming call volume if CPP is available.  Kerr believes that
to displace wireline minutes, cellular and PCS must be positioned to offer
service comparable to landline with the added benefit of personal mobility.
"Forcing customers to pay for incoming calls fundamentally conflicts with this
vision," said Kerr.
    "Over 60% of US non-cellular users report that improved bill control would
increase their likelihood to subscribe," added Kerr.  "Prepaid, correctly
positioned, could target these non-users and bring them into the user market."
    The report additionally looks at global markets that have successfully
utilized prepaid plans to increase subscriber numbers. Kerr emphasized that a
balanced combination of CPP and Prepaid options hold a wealth of revenue
generating opportunity for US wireless operators.  "The Western European
market experiences with prepaid services offer some important lessons for US
operators.  Prepaid, when positioned at a modest premium, does not cannibalize
the subscription business but in fact stimulates additional growth."
Conversely, when prepaid tariffs are punitively high, as in some N. European
markets, prepaid has more limited appeal.
    Editorial Contact:  Kelly Quinn, tel. +1 617 738 1300, fax +1 617 244
9488. email kquinn@strategyanalytics.com  ( http://www.strategyanalytics.com )

    Company Background:
    Strategy Analytics, formerly BIS Strategic Decisions, provides information
and insights which help global competitors develop strategies in consumer
electronics and media, communications, personal computing, automotive
electronics, and enabling technology business.