When smartphones began their ascendance in the telecom industry, the lines between prepaid and postpaid (or contract) plans were clearer: either pay a set amount before usage or commit to an ongoing charge. With phone plans extending beyond the simplicity of “minutes,” the former was especially useful for companies looking to convince customers to become early adopters. Dubious of committing to new tech in its infancy? No problem. With unfamiliar tech and high buy-in amounts relative to flip phones, prepaid plans provided an easy entry.
Today, the mobile landscape has reached stability, with 85% of the US population owning a smartphone, and customer behaviors and expectations having become more predictable. Further, the lines between prepaid and postpaid have blurred. Through their “half-in, half-out” nature, prepaid mobile plans are obsolete, adding even more complexity. Constantly evolving and often inscrutable industry standards hamper the possibility of an excellent overall user experience.
It’s time to treat prepaid plans as relics of a forgotten past filled with antennas, car phones, and beepers.
The goal of the telecom industry is to shrink the gaps between people, creating connection in a remote world. A new standard of mobile plan—perhaps closer in nature to a postpaid model—can do just that, leveling the playing field for users and providers alike. By emphasizing simplicity, new technologies, and consumer trust in their service models, telecoms can stay relevant by better serving the customer.
Add Simplicity
A dazzling array of options awaits anyone looking to buy into a mobile data plan, and while gut instinct might dictate that “more options = better,” the reality is that more options dictate more complexity and less clarity.
While prepaid plans began as an option for predictable costs and flexibility, the benefits have faded over time. Lower costs often dictate lower speeds and fewer features, while the increasing commonality of unlimited data makes data caps less of a roadblock. Further, distinctions between different plan types are becoming vaguer and relegated to the fine print, where practices like deprioritization and throttling tend to live.
Recommendations:
- Make variations in data speed clear. Don’t call it “unlimited” if there are actually limits.
- Opt for a consistent sliding scale of price per spans of data usage. Look to recent customer usage patterns to define the delineations between spans.
- Avoid excessive similarity with a modular approach to features. Let customers take what they need and leave behind what they don’t.
Embrace New Technologies
As daily mobile phone users, we often take for granted that as of 2020, 85% of our inhabitable world is covered by 4G mobile broadband coverage (93% total including previous generation technology). On paper, traditional prepaid plans seem like the easiest way to gain access to advanced modern mobile infrastructure, but the reality (as noted in the previous section) is not as clear-cut. A simple plan and payment structure is a valuable asset to have, and new technologies minimize the amount of necessary compromise.
While internet connectivity has been advancing in parallel to (but arguably at the same pace as) mobile data networks, harnessing a combination of both technologies provides solutions to many traditional limitations. Google’s mobile branch, Google Fi, has been doing this since its inception—treating multiple mobile and WiFi networks as equivalent access points for users’ voice, text, and data activities, regardless of locale.
Recommendations:
- Focus investments on advancement of efficiency and effectiveness of technology, rather than raw financial gains.
- Don’t ignore non-urban customer bases. Utilize technology to equalize differences in infrastructure and locale.
- Re-evaluate technological capabilities, shortcomings, and expectations on a regular basis. Use the iterative process as a basis of consistent transparency and communication with customers—and proof that stagnation is not occurring.
Focus on Customer Trust
Every industry has words that command intense, visceral reactions and connotations—and for telecom, the terms “prepaid” and “contract” come with plenty of baggage. Using those words gets messy, so why not change them?
A more adventurous and forward-thinking provider might opt for true disruption—abolition of the concepts of prepaid and postpaid altogether. Creating a third option, closer to the subscription services popularized by companies like Netflix and Amazon, creates an opportunity to rebrand and evolve from the previous era of the telecom industry. That era, though marked by pervasive progress, was also marred by missteps in technology, legislation, and practices that fostered distrust between mobile providers and users.
Providers today, new and old, are faced with opportunities with each iteration of mobile tech. to hinge their businesses on truly serving the customer. While mobile hardware is the focus of much user adulation, mobile providers tend to be held at arm’s length. A new, uncompromised focus on customer trust should be at the top of every providers’ agenda, starting with values that distinguish them from most other players in the corporate environment: simplicity and transparency.
Conclusion
If the basic landline network is the ancient foundation of the telecom world, then the advent of mobile tech is its Industrial Revolution—and similar to the actual Industrial Revolution, many practices worked, but at the cost of user experience. Prepaid plans today (and to a lesser degree, postpaid plans), are like burning coal. They’re still around because they still work, but they don’t always look out for the needs of the modern consumer. A new standard, fueled by simplicity, trust, and progress, is part of the formula for the next revolution.
Brandon Goei
Design Consultant