WASHINGTON-A new study, “Prepaid Cellular/PCS in Latin America: Market Potential and Business Strategies,” compiled by The Strategis Group, Washington, D.C., reports prepaid cellular/personal communications service is driving growth in Latin America.
Only three years after launching, prepaid cellular/PCS service generates more than 25 percent of new subscribers in Latin America, said the report. The Strategis Group forecasts that by 2005, two-thirds of all new cellular/PCS subscribers in Latin America will sign up through prepaid plans.
“Setting the prepaid pricing level is the operator’s most important decision in prepaid markets,” said Strategis Group analyst Stuart Adler. “Prepaid pricing determines the contract/prepaid subscriber mix and significantly impacts revenues.”
Lower prepaid prices are encouraging rapid growth and causing contract subscribers to migrate to prepaid, the report said.
Telcel in Venezuela, for example, prices prepaid service at 39 cents per minute, resulting in rapid growth, while Comcel in Colombia prices prepaid at 74 cents per minute and has experienced sluggish growth.
