Prepaid Broadband Services for Cable Industry

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Capturing Profitable

Revenue Growth

Prepaid Broadband Services Opportunity

for the Cable Industry


The Prepaid

Broadband Services

Opportunity for the

Cable Industry

HIGHLIGHTS

The US cable industry should look at the

MSOs in the emerging markets, who

have managed to successfully

penetrate the low-income markets in

which they operate.


Introduction

US Home Broadband Adoption, Source: PEW Internet and American Life Project

The challenge is to identify the levers that will enable broadband service providers to offer

profitable broadband packages at price points that the low-income market requires

Broadband adoption rates in the U.S. have plateaued over the past few years, as is evident

from the graph alongside.

While there have been, and continue to be, a number of government and nonprofit initiatives

focused on PC adoption and digital education, the largest barrier to broadband adoption is

price.


Why Prepaid Broadband?

Learnings from emerging markets, where household incomes are

lower and credit histories are often non-existent

The penetration rates for telecommunication services, are amongst

the highest in the world.

The profits of companies offering plans are comparable with those of

major U.S. telecom providers

Prepaid broadband holds the key to tap into the low-income market segment


Benefits of prepaid plans

• A prepaid plan results in less cost to the operator, due to lower customer care expenses, simpler IT platform, no bad debt expenses, and better monetization of infrastructure.

1. Reduced Cost

• By creating a segment-specific, profitable product, MSOs can harness the potential of an entirely untapped market.

2. Opens Whole New Market

• MSOs can experiment with various products in their target market, playing with the combination of price, speed, duration and usage to see how consumers respond to a product.

3. Enables Experimentation

• With prepaid plans, customers are able to use only that bandwidth for which they have paid, and additional bandwidth is available only if the customer makes an additional payment.

4. Usage-Based Billing

While the prepaid component is a critical aspect of the consumer value

proposition at work, it can also benefit service providers in the following ways:


Deployment Strategies

Phase 1:

Connect to Compete

Introduce new customers to a prepaid plan.

Stabilize systems for a prepaid platform, evaluate initial results on a smaller scale and drive initial learning in a low risk environment.

Phase 2:

Subscriber Churn

Address existing customer churn by moving customers with payment challenges to a prepaid platform.

Drive further learning in a very targeted environment.

Phase 3:

Market Rollout

Create the brand, product and packaging elements required to launch into a given market or markets.

Wipro proposes a phased deployment approach, as detailed below to

MSOs for implementing prepaid broadband solutions:


Challenges Associated with Prepaid Products

Rigidity of Existing Billing Systems

Usage-Metering Solution

Cannibalization of Existing Product

Lower ARPU


Conclusion

Given the stagnating broadband penetration,

cable operators need to look at offering prepaid

plans in the markets where they operate.

This can help them penetrate lower-income

markets and allow them to tailor their broadband

offerings according to the needs of the various

market segments.

It also allows MSOs to introduce the concept of

usage-based payments, a point of potential

contention between the industry and its

customers.


For more details please visit the link below:

http://www.wipro.com/Documents/insights/whitepaper/Wipr

o_Accelerate_Whitepaper_Final_19_09.pdf

http://www.wipro.com/Documents/insights/whitepaper/Wipro_Accelerate_Whitepaper_Final_19_09.pdf

http://www.wipro.com/Documents/insights/whitepaper/Wipro_Accelerate_Whitepaper_Final_19_09.pdf


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