Prepaid growth: economy or penetration rate?

prepaid accounted for the majority of total subscriber adds. Second is that it marked the lowest growth period ever. It’s this second one we’ve left mostly unexplored on Prepaid Reviews. That’s because there was a simple narrative to explain the prepaid growth: with the economy slumping, people are looking to more cost effective communications solutions. However, the second story gives some pause to that. After all, we’ve heard something in the past regarding prepaid adds once U.S. penetration reaches 100 percent. Alex Besen, an MVNO consultant, once said that MVNOs will see greater growth once the U.S. penetration rate reaches 100 percent. This is because MVNOs will present opportunities for carriers to draw subscribers from other carriers, which is the only way to gain once penetration is universal. They also allow for more targeted marketing, since MVNOs can focus on a single niche. The same principle can be applied to more than just MVNOs, though. Because of the new offering by Boost Mobile and the expanding footprints of Cricket wireless and MetroPCS, they present consumers with an alternative to the familiar big brands. They can therefore pick up customers who want to try something different. But what about the 100 percent penetration part? After all, the report says that the U.S. is stuck at 90 percent penetration. As a friend in the consulting field tells me, it’s because there are many areas in the U.S. which do not receive coverage. So the effective penetration is by 100 percent, meaning the market behaves as if there is 100 percent penetration. Anyone have anything to add to this?]]>