& cplSiteName &

Pre-Paid Opens New Frontier for US Broadband

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
9/19/2012
50%
50%

The pre-paid model has worked wonders for the mobile market over the years, so why shouldn't it be applied to U.S. broadband?

Wipro Ltd. (NYSE: WIT) is pitching the idea to the nation's cable operators as they think about how to stoke broadband service growth. They'd like to tailor packages to lower-income consumers (or students), but without the associated risks of non-payments and bad debt. (See Comcast: 100K Families Take Internet Essentials Tier.)

"There's sort of a hole out there that's not being addressed," says Stephen Snyder, the global head of business innovation for Wipro's Global Media and Telecom unit. "It could open up a whole new revenue stream."

Wipro's answer is Accelerate, a platform customized to handle the billing, customer care and operational support of a pre-paid service -- basically everything beyond the truck roll and installation of the service itself.

Snyder acknowledges that cable hasn't pursued low-income markets aggressively because they've typically been more trouble than they're worth. Wipro, a Service Provider Information Technology (SPIT) firm and consultancy that also runs an energy management business, claims its ability to optimize the behind-the-scenes processes can make the margins on a pre-paid broadband product consistent with what operators get from their traditional service bundles.

"If we can make that a 40-to-50-percent-margin product, [service providers] should not run away from it," Snyder says, noting that Wipro has been modeling the idea around packages that could be offered for about $9.95 per month.

And Wipro's been at it for a while in other parts of the world, including India, Hungary and in the Middle East, where pre-paid is the first port-of-call for a range of services, including fixed line and wireless.

To provide some separation from an operator's core service packages, MSOs could also create "flanker brands" for a pre-paid offering, Snyder says. Pre-paid broadband could also reach beyond lower-income targets -- to people in vacation rentals, for example.

But Snyder also realizes that that cable operators, particularly the larger ones, like to do things themselves. Wipro is amenable to letting an MSO pilot the idea for two to three months to get a sense of how consumers respond and to test the business case.

Wipro is still in early discussions with U.S. cable operators about this kind of model. Snyder says there's also some potential for pre-paid plans to be applied to video -- something that some operators are already considering as they seek new ways to stem pay-TV subscription losses. (See Pondering Pre-Paid Cable TV.)

(To learn more about the opportunities and challenges of the pre-paid broadband model, tune in Thursday, Sept. 20, at 12:00 noon ET for "Driving Growth Through Pre-Paid Broadband," a Light Reading webinar that will feature a panel with Snyder; Novation Broadband co-founder and former Charter Communications Inc. exec Ted Schremp; and Siber Consulting LLC founder and President Richard Siber.)

— Jeff Baumgartner, Site Editor, Light Reading Cable

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
shygye75
50%
50%
shygye75,
User Rank: Light Sabre
12/5/2012 | 5:20:48 PM
re: Pre-Paid Opens New Frontier for US Broadband


We need to get Heavy Reading analysts on Twitter so that they can appear as expert witnesses on LR. But here's a question: How do you get (presumably wireline) prepaid broadband service without a broadband access line?

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:20:48 PM
re: Pre-Paid Opens New Frontier for US Broadband


This obviously wouldn't apply to areas with no broadband lines... but understand why you'd ask since I stepped in it by bringing up the FCC, which has been more focused on providing access where there is no broadband (but they have also been pushing for more affordable broadband too). JB

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:20:48 PM
re: Pre-Paid Opens New Frontier for US Broadband


Teresa Mastrangelo at Broadband Trends weighed in on this on Twitter, noting that she sees a very small market in North America for this, though it could play well in some markets.   While the FCC likes to talk about the millions of consumers out there that haven't adopted broadband, but the size of a potential market doesn't mean it's all there for the taking with the waive of a wand, of course. But I'd have to agree that any success in the U.S. will hinge on how and where this sort of pre-paid offering is marketed. A good question to bring up on tomorrow's panel on this topic. JB


 

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:20:47 PM
re: Pre-Paid Opens New Frontier for US Broadband


Prodigy holding on Line 1; CompuServe on Line 2. AOL...

shygye75
50%
50%
shygye75,
User Rank: Light Sabre
12/5/2012 | 5:20:47 PM
re: Pre-Paid Opens New Frontier for US Broadband


So... prepaid dialup?

From The Founder
Either we perform a complete 'factory reset' on the way the telecom industry creates and deploys virtualization, or we face the consequences.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Infinera Introduces Instant Network

4|20|17   |     |   (1) comment


Mike Capuano, vice president of marketing at Infinera, discusses the advancement from Instant Bandwidth to new Instant Network capabilities, which include Bandwidth License Pools, Moveable Licenses and Automated Capacity Engineering (ACE).
Women in Comms Introduction Videos
Vodafone's Eubank on Sponsors, Mentors & Moving On Up

4|19|17   |   4:25   |   (0) comments


Vodafone America's Head of Operations Kimberly Eubank breaks down the difference between a sponsor and a mentor and shares why both made a big difference in her career.
LRTV Custom TV
NYC Auto Show: Are We Smart Yet?

4|18|17   |     |   (0) comments


The auto industry is facing some big transformations as electric vehicles, autonomous technology and connected cars are seen as the future of the industry. During the much-anticipated NY international auto show, there was an emergence of new technology and mobility service on the show floor. Aside from performance, brands like Lincoln, Hyundai, Honda, Mercedes and ...
LRTV Huawei Video Resource Center
The Impact of Video

4|18|17   |     |   (0) comments


David Mercer from Strategy Analytics discusses the impact of video on current strategies.
LRTV Custom TV
Pardeep Kohli Discusses Network Transformation & the Market Opportunity for the 'New' Mavenir Systems

4|13|17   |     |   (0) comments


In a brief discussion at MWC 2017, Heavy Reading analyst Adi Kishore talks to Pardeep Kohli, CEO, Mavenir Systems about the creation of the 'new Mavenir' and some of the key challenges facing operators in today's market. A key theme of the discussion centers around operator need for software-only, virtualized solutions and how they will need to adapt to ...
Women in Comms Introduction Videos
Tech Maverick Shares Her Tips for Gender Inclusivity

4|12|17   |   7:28   |   (0) comments


Wendy Hall Bohling, a corporate escapee, author and gender exclusivity consultant, tells her story of sexism, bias and progress along the road to gender equality in the workforce.
LRTV Huawei Video Resource Center
Huawei at MWC 2017

4|11|17   |     |   (0) comments


At Mobile World Congress 2017, the biggest mobile industry gathering of the year, Huawei showcased its new innovations and solutions with the theme "Open Road," which focuses on cloud, 5G, operation transformation, videos and consumer-oriented products. Its campaign has been recognized by three awards given by GSMA.
LRTV Custom TV
China Telecom NFV Infrastructure on RSD

4|6|17   |     |   (0) comments


Lynn Comp, senior director of market development of Intel, is joined by Chong Zhang, storage engineer at Inspur and Ou Li Yan, architect for technology strategies of China Telecom on what NFV brings.
LRTV Custom TV
Nokia's IMPACT Software Demo

4|6|17   |     |   (0) comments


Khamis Abulgubein of IoT market development at Nokia demonstrates IMPACT (intelligent management platform for all connected things), a software solution with a horizontal approach to managing any device on any application.
LRTV Custom TV
Nokia Introduces Virtual Service Router for More Rapid Service

4|6|17   |     |   (0) comments


James Cumming, product line manager for virtualized service routers at Nokia, demonstrates how the virtual router based off the Nokia ecosystem changes the network function experience.
LRTV Custom TV
The Keys to SD-WAN Success

4|6|17   |     |   (0) comments


Versa Networks CEO Kelly Ahuja talks about the key requirements for service provider-managed SD-WANs.
LRTV Custom TV
Intel & Cisco on Joint 5G Solutions

4|5|17   |     |   (0) comments


Dave Ward, SVP and CTO of Cisco, is joined by Sandra Rivera, corporate VP and general manager of network platforms group of Intel, on the revolutionary 5G technology that changes networking and computing fundamentally.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Brazos Hall - Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Time for a Telecom Reboot
Steve Saunders, CEO and founder, Light Reading, 4/19/2017
Comcast Ready for Clash With Hulu
Mari Silbey, Senior Editor, Cable/Video, 4/18/2017
Unlicensed: It's What's Next for US Mobile Operators
Dan Jones, Mobile Editor, 4/19/2017
Verizon CEO Comments Feed Merger Frenzy
Carol Wilson, Editor-at-large, 4/18/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Animals with Phones
Now That's an Ad Campaign Click Here
Meerkats to the rescue!
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.