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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (4606)	3/23/2001 9:56:56 AM
From: Eric L	Respond to of 5390

re: Prepay - Camel 2 Simon Buckingham of Mobile Lifestreams comments on Ericsson's "PrePaid System" and opines on the the future of prepay >> Ericsson Launches CAMEL 2 Based Roaming System for PrePaid Mobile Subscribers Today, "Ericsson announces its PrePaid System, a solution is based on CAMEL Phase 2. The new product development underlines Ericsson's position as the world's leading supplier of Intelligent Network-based PrePaid systems. To date, Ericsson has sold more than 80 PrePaid systems to GSM, TDMA and third generation system Service Providers. The PrePaid System is based on Customized Applications for Mobile Enhanced Logic (CAMEL) Phase 2, a standardized protocol that introduces seamless roaming for PrePaid subscribers. In addition to PrePaid roaming, Ericsson offers functionality like real-time charging of SMS, parallel charging of services as well as GPRS support for PrePaid subscribers. About CAMEL CAMEL, the industry standard that enables product interoperability with,in and between multi-vendor networks, was first developed in 1999. The majority of GSM operators have tested CAMEL Phase 1, and many are getting ready to implement Phase 2, which offers significant added revenue generation opportunities. " It is amazing how long it has taken for these prepay platforms to be introduced- years after prepay has been a success, prepay customers are just not getting access to services that have been around to postpay customers for years- like roaming. << >> The Future For Prepay Prepaid mobile communications, in which people pay for their airtime in advance, have over the past couple of years propelled the mobile communications industry to new highs and into new customer groups in many but not all countries around the world. However, analysis by Mobile Lifestreams would indicate that the future of prepay looks very different: · Network operators are telling us that prepay users are mostly not profitable for them- because prepay tariffs are no longer time related (necessitating regular top ups), network operators have little or no control over how much return they will get from that user- who may not use their mobile phone much at all. Networks feel compelled to keep pushing prepay to acquire quantities of customers, even if the quality is not there. · Many prepay customers never register with their network operator- despite inducements such as additional airtime credits for submitting their details. In such cases, network operators have no customer data or relationships. Anonymity, one of the advantages of prepay to the user, is proving to be a big disadvantage to the operators. · Mobile terminals are getting more feature-rich as nonvoice services come to the fore. Youth markets are a key driver for such nonvoice services- and a key customer group for prepay- yet it is difficult for network operators to aggressively subsidize sophisticated multimedia capable terminals such as the Casio Message-Cam (see the Devices Zone on www.mobileMMS.com). Network operators are generally willing to subsidize such devices when they are connected to post-pay tariffs on a minimum contract term because they have some guaranteed minimum revenues and because Average Revenue per User (ARPUs) tend to be higher for users of such devices. In 3G markets, a substantially larger proportion of terminals will be smart and multimedia enabled, necessitating post-paid tariffs. · Two of the biggest areas of revenues predicted for the 3G world are mobile commerce and mobile location. Mobile commerce requires user authentication which is inconsistent with anonymity, and mobile location requires user opt in and opt out to services, which is also inconsistent with the anonymity that prepay can provide. For example, One2One of the UK announced yesterday that it was increasing the recommended retail price for its cheapest prepay package from 39.99 GBP to 69.99 from May 2001, in an attempt to reduce the percentage of prepay customers in its total base from 70% to 50%. Quality of customer revenues rather than quantity are getting more focus. As such, Mobile Lifestreams predicts that prepay will account for a diminishing proportion of the total mobile market and that the postpaid billing mechanism will become resurgent. Within a couple of years, the two forms of payment are likely to be roughly equally used in the 3G world, with application centric devices on postpaid tariffs and voice centric terminals mainly on prepay tariffs. Thereafter, as network operators begin to focus more on the quality of their users, prepay may fall away further. << - Eric -