Mark and Bosco,
It's true that Sprint PCS is rolling out markets at a much slower pace than they initally anticipated. This has been mostly due to the cost associated with the build out as well as the local zoning problems they have encountered when attempting to build the large number of cell sites required for PCS carriers. That coupled with the issue of relocating current users of their spectrum in certain areas have forced Sprint PCS to seek congressional action on these obstacles. The speed of the rollout will definitely impact the ability for Brite to grow the prepaid wireless subscriber base.
As for the U.S. vs. Europe prepaid market penetration, I agree with your source in that there is a greater market penetration overseas on the GSM type networks. This is mostly due to the fact that prepaid wireless has been available a lot longer in Europe than the U.S. In Europe, the prepaid service intelligence exists inside a smartcard that is inserted in the handset. This means that the cost to initiate a prepaid wireless service is much less due to the lack of special network hardware and software as required in the U.S. With the exception of the GSM PCS carriers in the United States, U.S. carriers do not utilize smartcards within the phone handset. This requires that the prepaid service intelligence must reside within the network at a much greater cost. The prepaid vendors are using the service approach to counter this obstacle vs. a large turnkey system purchase. Two factors are driving the explosive growth this year in prepaid wireless. The first is the rollout of additional wireless competitors that is slowing the growth rates of traditional cellular carriers forcing them to look for new vehicles of revenue growth. The second is the large untapped market of the credit-challenged which have been turned away in the past. With the entrance of competition, wireless carriers are moving from the mass marketing of wireless service to a more targeted or niche approach. This is the fuel on the fire of prepaid wireless service in the US.
As for the speed at which Brite will recognize substantial revenue, this is mostly in the hands of Sprint PCS. Typically, a carrier will introduce this service in a single market for a trial period (usually 90 days long). This allows the carrier to determine the market acceptance and how best to distribute the service not to mention the training of the sales channels. Once the feasibility and profitability of the service is determined, the carrier will then rollout the service to all markets in a phased approach. You can see that Sprint PCS will be in the driver's seat but hopefully Brite is aggressive and will assist in this effort.
You should also note that it will take between 60 and 90 days (from contract signature) for Brite to rollout the first market. Not knowing when the contract was signed, I can't guess when the first market will go up.
Hope this helps,
Crash
P.S. Thanks for the job title but I'm not sure I can fit it on my business card. Oh yes, you didn't mention who was going to be wearing the WonderBra. ...:-) (Crash ROFL) |
