Wednesday, January 5, 2011

How important are postpaid subscribers to the telecommunications providers?

PhoneArena reports that Verizon, a major U.S. mobile phone service provider, ends early upgrade and "New Every Two" programs. This means that the Verizon is no longer promising you a new mobile phone after your contract expires and you would just have to sign up again on whatever offer they have available at the time. In the Philippines, these are what we know as retention and early retention programs. Here is to hoping that this does not give the local telecoms and ideas. 

But it got me thinking, how important are the postpaid subscribers to the local mobile phone service provider. There are about 85 million mobile phone lines active at present. Smart Communications had more than 50% of that market with 45 million subscribers. Coming in second place is Globe Telecom with 25 million subscribers. The latest entrant to the market, but maybe the fastest growing, Sun Cellular has 15 million subscribers.

While Globe Telecom and Sun Cellular have made much due lately about who has more postpaid subscribers Of Smart Communications 45 million subscribers, a little less than 500,000 are postpaid, and that would already include corporate accounts. That means that only 1 in 90 of Smart Communications subscribers is postpaid. Globe Telecom has 1 million postpaid subscribers, this means that only 1 of 25 subscribers is postpaid. Sun Cellular has 1.1 million postpaid subscribers, which is a little better than 1 in 14.  

With only 1 in 33 mobile phone service subscribers being in postpaid plans, it makes you wonder how important postpaid subscribers are to the industry. Traditionally, postpaid mean lower cost of service and a free mobile phone. Today with so many unlimited services being offered to the prepaid market, the main advantage to keeping a postpaid plan is the free mobile phone. 

Food for thought. 


  1. There really isn't any advantage to getting a cheap postpaid line. I haven't checked with the more expensive plans but any Smart Plan from 1200 and lower doesn't provide much value over getting a prepaid line. The free phones for these lines are not much and you can often get them cheaper and openline somewhere else. At Plan 500, you're paying a little over a peso for one text while you can just subscribe to those unlimited promos on prepaid for a cheaper rate.

    I hope our telcos would start providing more incentives (like bundling those unlimited plans in, cheaper rates) in getting a postpaid line. As it stands, it doesn't offer much aside from the security of keeping the same number for a few years.

  2. Yes, I know what you mean. Sometimes the offers given to prepaid subscribers are better than the options available to postpaid subscribers.

  3. I'd be happy if they actually subsidize the cost of the "free" phone. A locked phone doesn't offer any additional value when the same phone can be bought unlocked with official warranty from the manufacturers.

    I really hope the congress would push through with a SIM registration bill so people would opt for a postpaid line instead. :p Maybe then the telcos would actually give their postpaid subscribers those compelling promos and discounts that are only available to prepaid subscribers.


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