In a new report Ericsson has argued that the traditional approach to segmenting customers as prepaid or postpaid subscribers is outdated, and discusses operators who have successfully introduced more advanced models.

The way in which fixed and mobile telecommunications developed over time led to the sterotyping of services and subscribers, such that prepaid subscribers were assumed to be low ARPU customers and postpaid subscribers were assumed to be high ARPU customers. This pervasive assumption has led to the creation of siloes within operators’ businesses, with separate products, systems, sales and marketing, and support for these ”segments”.

However ”prepaid” and ”postpaid” are not segments as they are not characteristics of customer demand. Ideally they would simply be charging options available for different features within a service package.

Operators who have managed to move beyond the outdated notions of prepaid versus postpaid ”customers”, and introduced real-time convergent charging systems are now reaping the benefits. Advanced operators have experienced reduced churn, lower operating costs and faster time to market with new products.

The end of prepaid and postpaid