Navigating Change....
The PELORUS Group
Market Research and Consulting Services

FOR IMMEDIATE RELEASE

PELORUS ESTIMATES 
PREPAID TELEPHONY REVENUES 
TO EXCEED $19.2 BILLION BY 2004

Raritan, NJ - Market acceptance of prepaid telephony has been a long time coming, particularly in the United States.  As the first prepaid service, prepaid calling cards found their initial acceptance in Europe during the 1980’s, and only later in the United States.  Prepaid wireless and prepaid wireline are more recent introductions to the market, arriving in the 1990’s.  Nevertheless, according to a new report from The PELORUS Group entitled “Prepaid Telephony”, the combined markets for prepaid calling cards, prepaid wireless, and prepaid wireline will skyrocket to over $19 billion by 2004.

Recently, each of the three major categories of prepaid telephony has been thriving; their appeal is spreading beyond the confines of the credit challenged, such as mainstream consumers who buy for emergency purposes, or for use while traveling.  Not until the 1990s did prepaid phone cards develop as a major product in the US.  Part of the delay was that market’s dedication to credit cards.  Another was, and is, a lack of awareness.  As recently as 1996, only 30 percent of the population had ever heard of prepaid calling cards.  By the beginning of 2000, however, awareness had jumped to over 90 percent.  From just 1997 to 2000, the number of minutes sold quadrupled from 3.0 billion to 12 billion.  By 2004, PELORUS estimates the number of minutes sold will have mushroomed to 41 billion.

Meanwhile, the report points out, the wireless market continues to astound.  From a total subscriber base of 86 million at the beginning of 2000, that market has climbed above 105 million as we launch into 2001.  From that huge base, penetration levels from prepaid wireless will climb from 6.4 percent in 2000, to 16.4 percent in 2004.

The prepaid wireline marketplace is currently small in relation to other prepaid services.  Indeed, until recently most major carriers didn’t offer prepaid wirelines.  Today, a number of telcos, including many CLECs offer prepaid dialtone.  Many of these are targeting the 5.3 percent of US population that do not carry basic telephone services. 

According to the study, prepaid telephony in total grew from only $1.28 billion in 1995 to over $6.5 billion in 2000.  By 2004, that number will have soared to $19.2 billion.