Adrian Weckler makes some observations about how grans and kids are getting ripped off on pre-paid mobiles.

In fact, the appeal of the prepay phone isn’t the cost. People don’t buy prepay because it’s cheap. They buy it because:

– they are unbanked/have no credit.

– they want to keep control of how much they are spending on their bill. (this is at least part of the reason why average revenue for prepay customers is higher than for billpay).

– they don’t want a printed bill arriving at their home, for whatever reason.

So even though it’s more expensive, and these users may not have much money, they still consider it good value.

The psychology of the mobile is interesting, because it is tied up with personal space and control. A phone is a truly personal item, unlike say, a computer. You generally don’t share it with other people. The number is tied to you alone.

A prepay mobile gives a sense of control and independence to many people. They can control exactly how much they spend and keep information about their phone use private.

In fact, prepay service is quite an expensive service for mobile operators to run, because they have to share the revenue with the shop where you buy the credit and the transaction company (for example Alphyra). As a result prepay tariffs have to be around 10 or 15 percent higher than postpay tariffs.

It is true that there are mobile operators who provide budget prepay services in other countries, but they operate on a slightly different basis to the prepay setups we are used to in Ireland. (They depend on keeping a much higher proportion of the revenue.)