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Targeting the teen and young adult market may prove difficult for MVNOs without a prepaid option.
Teens and young adults are high on the list of desirable new customers for wireless carriers and MVNOs. But many members of this potentially lucrative demographic group have little credit history, which can make them risky postpaid customers. And some are averse to long-term contracts - a staple in the postpaid world.
Virgin Mobile USA and Boost Mobile always have catered to the youth market with prepaid wireless services, and all major wireless carriers have a prepaid option for their subscribers. Can youth-oriented wireless service plans thrive in the postpaid world or are prepaid plans a necessity for services geared toward young adult subscribers?
As newcomers, Amp'd Mobile launched its youth-oriented postpaid services in late December and Helio made its debut in early May targeting affluent customers in the 18- to 32-year-old age range. These two service providers - along with fellow MVNO Mobile ESPN - are being watched closely because they are competing on much more than just price. With targeted voice, video and data plans, these MVNOs are going after the high-paying postpaid customers coveted by traditional operators.
AMP'D ADDS PREPAID But in late May, Amp'd added a prepaid payment option. The company says the new plan is specifically designed to broaden the company's reach and give its customers more flexibility.
Of course, adding the prepaid option puts Amp'd more directly in competition with Virgin...