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Prepaid mobile gains in Asia-Pacific

In a year of tumultuous fortunes for the mobile communications industry, prepaid services in the Asia-Pacific region are flourishing.

SINGAPORE--In a year of tumultuous fortunes for the mobile communications industry, prepaid services in the Asia-Pacific region flourished.

Latest findings by market researcher Gartner Asia-Pacific revealed that prepaid connections in the region, including Japan, increased threefold from 34 million in the fourth quarter of 2000 to 108 million in the same period last year.

China contributed a significant portion to the growth as prepaid usage surged from 12 million to 66 million over the same period.

Prepaid cellular customers pay in advance for rate plans and do not require contracts with their respective operators. Other customers choose to get billed every month for the services they use.

In Asia-Pacific, prepaid customers constituted 76.2 percent of new cellular connections in 2001, Gartner's study found.

"Prepaid services are used to grow cellular markets in developing countries," said Foong King Yew, senior Gartner (Asia-Pacific) analyst for cellular communications. Price and ease of purchase of prepaids, as well as their increasingly attractive services, were some of the reasons for the adoption of these plans, he told CNETAsia.

However, in developed markets such as Australia, Hong Kong and Japan the growth of prepaid was slower. Gartner found that prepaid penetration decreased slightly in Singapore.

"The poor economic climate had caused some prepaid users to give up their SIM (subscriber identity module) cards," Foong said. A SIM card contains all subscriber-related data and is designed to be inserted in a mobile phone. He also attributed the drop to a customer base consolidation exercise in the Republic towards the end of 2001.

Foong predicts the percentage of prepaids connections in developing countries will continue to increase in the next few years.

Aloysius Choong reported from Singapore.

Asia-Pacific and Japan cellular connections by country (in thousands)

Country Q4 00 prepaid connections Q4 01 prepaid connections Year-on-year prepaid increase
Australia 2,115 3,317 1,202
China 11,490 66,196 54,706
Hong Kong 1,061 1,417 356
India 1,059 2,466 1,407
Indonesia 2,092 4,754 2,662
Japan 722 1,234 512
Malaysia 2,678 4,485 1,807
New Zealand 1,150 1,687 537
Philippines 4,953 10,146 5,193
Singapore 706 683 -23
South Korea 400 785 385
Taiwan 3,857 5,917 2,060
Thailand 522 3,248 2,726
Rest of Asia-Pacific 793 1,876 1,083
Total 33,598 108,211 74,613
Source: Gartner Dataquest (February 2002)