Faster data speeds can spur migration from prepaid to postpaid in India

Faster data speeds can spur migration from prepaid to postpaid in India

Summary: Most mobile subscribers in India are prepaid customers, for a variety of reasons. However, more would be willing to migrate to a postpaid connection if faster speeds were provided--a boost in ARPU for telcos.

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TOPICS: Mobility, Telcos, India
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Currently, over 95 percent of India's 750 million or so mobile phone subscribers are prepaid connections. However, it's the postpaid subscribers who bring in about 25 percent of a telecom operators revenues, reports The Times of India.

Existing prepaid customers are twice as likely to migrate to a postpaid connection, while those using existing Internet packs are four times more likely, reports consultancy firm PwC in a report looking into the changing profiles of customers in India. This is optimistic news for telecom operators who want more postpaid subscribers, who give them five times more revenue than prepaid customers.

That being said, migration from prepaid to postpaid is not that easy for everyone. Furthermore, in some cases, it ends up costing subscribers more in the long-term, as I've found out in the past. Even now, obtaining a prepaid connection is a cumbersome process, requiring proper identification checks and physical verifications at the address listed. In other words, you need to be home when someone from the telecom operators stops by to see if you live there.

The real issue with postpaid connections is the security deposit and having either established credit, and, a credit card. Now, posting a security deposit for some features, such as long distance, isn't that much of an issue, as proving established credit and providing a credit card. Simply put, the majority of people in India don't have credit cards in the first place for a variety of reasons, with the leading one being there’s no way of proving established credit. That's right, India doesn’t have a credit monitoring system such as Equifax abroad.

In essence, postpaid connections are really meant for salaried professionals, who can also provide proof of employment. In some cases, providing proof of employment also entitles them to deals or discounts which the telecom operator may have with that organization.

So for now, while many prepaid subscribers would like to migrate to a postpaid connection, it's also an uphill battle with the telecom operators. Unless they make it easier for subscribers, the majority of subscribers will remain prepaid in the long term.

Topics: Mobility, Telcos, India

Nitin Puri

About Nitin Puri

Originally from Canada, Nitin has been residing and working in India since 2009. He has worked in different ICT industries in countries such as India, Canada, and Tanzania. He is an avid follower and application developer within the growing mobile phone sector in India.

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