WiMax Goes Prepaid

Seeing potential for WiMax to attract short-term customers, Xanadoo Company LLC is preparing what it believes will be the first prepaid wireless broadband service in the United States.

Xanadoo already offers seven WiMax plans with contract lengths of three to five years. Starting in May, the operator wants to add short-term plans, with customers paying up-front for 7 to 90 days of access.

The prepaid model is familiar for landline users (think phone cards), and it's starting to get some play in the wireless broadband sphere. Bridgewater Systems Corp. (Toronto: BWC) came to CTIA Wireless 2008 yesterday announcing a prepaid option for its WiMax policy control products. (See Bridgewater Goes Prepaid.)

Bridgewater is probably not at the heart of Xanadoo's offering, though, since Xanadoo CEO Mark Pagon says he's not familar with that announcement.

For about two years, Xandaloo has been serving up WiMax to Texas, Oklahoma, and Illinois, attracting 14,000 customers despite that hair. (See Xanadoo Boasts Subscribers.)

Part of Xanadoo's plan has been to reach the customers that don't like the bundled cable or DSL subscriptions -- twentysomethings who use cellphones in place of landlines, for instance. "The profile of our customer is younger and the lifestyle is different from most of our communities," Pagon says.

WiMax could delve further into that territory by going prepaid. The service could also reach credit-strapped consumers who aren't 100 percent sure they can sustain a monthly bill, or business travelers who might be stationed in the area for just a few weeks.

Sprint Corp. (NYSE: S) and Clearwire LLC (Nasdaq: CLWR), the heavy hitters in U.S. WiMax, haven't talked about prepaid plans so far. But they've got all week at CTIA to come up with something.

Separately, Xanadoo announced it's been using Cisco Systems Inc. (Nasdaq: CSCO) equipment in its WiMax network. That is, it's been using gear from Navini Networks, which got acquired by Cisco in December. (See Cisco Buys Navini for $330M.)

It's a rare U.S. win for Cisco's WiMax group. "We put our focus on the emerging markets. This is a move into public network radio, which we are not the strongest on," says John Hindle, director of service provider mobility marketing at Cisco.

Among Cisco's recent WiMax wins is a nationwide deployment by Max Telecom, due to be completed by the end of 2009. (See Bulgaria Rolls Out WiMax.)

— Craig Matsumoto, West Coast Editor, Light Reading

Cequity 12/5/2012 | 4:08:57 PM
re: WiMax Goes Prepaid

Prepaid services were initially introduced by telecom service providers for credit challenged users. But overtime it has played a significant role in market expansion and extend the customer base beyond credit challenged customers. All these despite prepaid customer base generating revenue less than 40% of the total revenue


Zaheen B

Cequity Solutions

Pete Baldwin 12/5/2012 | 3:44:21 PM
re: WiMax Goes Prepaid Well, so much for being the first with a prepaid plan...


Anyone want to comment on the idea in general? Is a prepaid wimax/wifi plan something you'd consider for business travel? (I guess a lot of folks have bought wifi accounts at T-Mobile/Starbucks, so maybe the "first" prepaid plan happened a long time ago.)
rjmcmahon 12/5/2012 | 3:44:20 PM
re: WiMax Goes Prepaid For phones prepaid is a rip off. They target poor people like many in Mexico who don't have much credit. That's part of the reason Carlos Slim is now the richest person on the planet, i.e. ripping off poor people by selling them overpriced, prepaid minutes.

The US populace isn't so poor. We also create money by issuing debt. Promises are easier to make if they aren't prepaid. So most of us use credit cards.
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