Privacy and Prepaid Communication Services: Early Findings

Future market for Prepaid Mobile Phone Service
As reported in Baskerville’s Global Mobile Prepaid Strategies and Forecasts (2003):

• 50% of the world’s mobile phone customers now use prepaid, generating over 1/4 of the total revenues in the global market.
• Most markets continue to actively promote prepaid services, especially the largest and fastest growing markets (China, India).
• Between the end of 2002 and end of 2010, it is expected that 80% of new customers will opt for prepaid services.
• The one billionth prepaid customer is forecasted to take up service in 2005.
• From 2005 and beyond, at least 3/4 of the total mobile base will consist of prepaid users.
• By end of 2010 it is forecasted that there will be 1.5-billion users, generating over $240-billion per year in revenue.

The market for prepaid mobile phone service in Canada as reported by the Canadian Wireless Telecommunications Association (Subscriber Statistics Third Quarter - Q3 2005):

• 21.3 per cent of total mobile phone market in Canada is prepaid.
• Bell Wireless Alliance holds 36% of the prepaid market in Canada. Bell Wireless Alliance includes Bell Mobility, NothernTel Mobility, Telebec Mobility and the proportionate share of the Virgin Mobile Canada joint venture. TELUS Mobility has 22%, Rogers Wireless has 39%, and Aliant Mobility has 2% of the Canadian prepaid market.
• As a percentage of marketshare within each service provider’s portfolio, prepaid accounts make up 27% of Bell Wireless Alliance customers; 23% of Rogers; 17% of TELUS, and 11% of Aliant customers. Prepaid accounts for MTS Mobility and SaskTel Mobility are not accounted for.
• With the recent acquisition of Microcell, prepaid accounts now make up 24% of Rogers' portfolio.

Forecasts for the Canadian prepaid mobile phone market (Baskerville, 2003):

	2004	2005	2006	2007	2008	2009	2010
Total mobile phone market (subscribers 000s)	14,168	15,242	16,271	17,269	18,142	18,847	19,486
Total growth (%)	8.8	7.6	6.8	6.1	5.1	3.9	3.4
Prepaid as a percentage of total subscribers to mobile phone service	27.8	28.3	28.7	29.1	29.4	29.6	29.8
Prepaid subs (000s)	3,938	4,314	4,674	5,023	5,328	5,575	5,799
Prepaid growth (%)	11.3	9.5	8.3	7.5	6.1	4.6	4.0
Total mobile phone revenue (US$ 000s)	326,000	359,000	391,000	421,000	448,000	471,000	491,000
Prepaid as a percentage of total mobile phone service revenue	6.95	7.08	7.18	7.27	7.34	7.40	7.44
Total penetration among population	43.5	46.31	48.93	51.39	53.43	54.93	56.21
Prepaid penetration of population (%)	12.1	13.1	14.1	14.9	15.7	16.2	16.7

Highlights:

• Tailing off of total growth; but prepaid as a percentage of total market rises slightly (about 2%) during this period.
• Prepaid rises slightly (about half a percentage point) as a percentage of total mobile phone service revenue during this period.
• Prepaid rises about 4.5 percentage points in penetration of the population during this period.
• The introduction of regulations would affect at least one in four, perhaps one in three, people who have mobile phone service.

Comparison with United States mobile phone market (Baskerville, 2003):

Highlights:

• US prepaid as a percentage of total market remains at half of Canada’s throughout the period.
• US experiences slight decline in growth parallel with Canada.
• The US has a very similar profile, but with half prepaid subscribers as percentage of total subscribers.
• If similar regulations were introduced in both countries, they would affect a larger segment of the total mobile phone market in Canada into the foreseeable future.

Current knowledge of prepaid regulation

Ongoing work in the EU, particularly related to Directive 2002-58, seems not to have looked at the specific question of an ID requirement at the point of sale. Rather, the focus seems to be on use, disclosure and retention of data (including traffic data) that is in the system. This contrasts with the question of whether the data collection regime should be expanded to include a requirement for prepaid mobile.

To participate in the Privacy and Prepaid Mobile Phone Study contact:

Privacy and Prepaid Mobile Phone Study
Centre for Policy Research on Science and Technology
Simon Fraser University
515 West Hastings Street
Vancouver, BC Canada V6B 5K3
Fax: 1 604 291 5239
Email: g.gow@lse.ac.uk

The Centre for Policy Research on Science and Technology is part of the School of Communication at Simon Fraser University. Established in 1988, CPROST projects engage in research on the relationship between public policy and technology.

Dr. Gordon Gow is a Research Associate with CPROST. His full-time post is Lecturer in the Department of Media and Communications and Director of the MSc Programme in Media and Communications Policy and Regulation at the London School of Economics and Political Science.

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