& 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?

Featured Video
From The Founder
The 'gleaming city on a hill,' Steve Saunders calls it. But who is going to take us from today's NFV componentry to the grand future of a self-driving network? Here's a look at the vendors hoping to make it happen.
Flash Poll
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 2, 2017, 8 Northumberland Avenue – London
November 10, 2017, The Westin Times Square, New York, NY
November 30, 2017, The Westin Times Square
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
Could 5G Have Found Its Glass Ceiling?
Dan Jones, Mobile Editor, 9/20/2017
1 Million Pirate Set-Top Boxes Sold in the UK
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 9/20/2017
Why Amazon May Be Cable's Biggest Threat
Mari Silbey, Senior Editor, Cable/Video, 9/22/2017
Comcast Shuts Down OTT Again
Mari Silbey, Senior Editor, Cable/Video, 9/19/2017
Photo Highlights: Operations Transformation Forum 2017
Ray Le Maistre, International Group Editor, 9/17/2017
Animals with Phones
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed