Yankee Group Study Shows Prepaid Wireless Rates Go Mainstream, Market To Grow - prepaid wireless services now affordable - Industry Trend or Event

Cambridge Telcom Report, August 23, 1999

A recent study by the Yankee Group reveals that prepaid wireless services are rapidly becoming more affordable. As a result, we expect prepaid users to grow from a meager 3.5% of all wireless subscribers in 1998 to 22% in 2003.

In the first of a series of reports addressing the prepaid wireless market, Prepaid Wireless Service Becomes More Affordable, the Yankee Group compared prepaid plans from the leading carriers to their postpaid plans. Key findings include:

* Prepaid plans for the price leaders are only a 20% premium to postpaid plans.

* PrimeCo PCS, Omnipoint, and AirTouch have plans that are closest to "parity" with postpaid plans. GTE, Sprint PCS, and SBC have the most expensive plans. AT&T Wireless and PacBell Wireless do not offer broad-based prepaid plans.

* Prepaid makes most sense for subscribers using less than 150 minutes per month. Moderate to heavy users generally pay a much higher premium for prepaid plans.

"Prepaid is moving beyond the credit challenged and becoming more mainstream", says Mark Lowenstein, Senior Vice President of the Yankee Group's Global Wireless Program. Notes Adam Zawel, principal author of the report: "prepaid is helping carriers offer wireless services to market segments where cost control is important, such as teens, college students, and the military."

The Yankee Group study found that Florida is a particular hotbed for prepaid, where in Miami four competitors offer fairly aggressive prepaid plans. Carriers such as Omnipoint and PrimeCo report over 50 percent of new subscribers are signing up for prepaid.

Still, prepaid in the United States is playing catch-up with Europe, where countries such as Italy and Portugal have the majority of their subscribers on prepaid plans. There are important cultural differences leading to the larger market for prepaid in Europe. Prepaid services, metered rates, and debit cards have been an ingrained part of the telecom services infrastructure in Europe for a long time. "The United States remains fundamentally a 'credit- based' society, which is why prepaid services have not grown as fast", says Lowenstein.

FMI: Adam Zawel at 617-880-0298 or azawel@yankeegroup.com.

The Yankee Group, a subsidiary of Primark Corporation, is an internationally recognized leader in IT research and advisory services, focusing on strategic planning assistance, technology forecasting, and IT industry analysis. The company provides assessments and strategic advice on the Internet, communications, computing, and energy industries for a wide range of end-user and vendor businesses from numerous industries. The Yankee Group specializes in helping clients develop technology initiatives that are in synergy with their core business strategies. Established in Boston, Mass. in 1970 as the industry's first research and advisory services firm, The Yankee Group has built a solid reputation worldwide for its penetrating analysis of key information technology issues and the personalized one-to-one service provided by its analysts to all their clients. Additional information is available at www.yankeegroup.com.

Primark Corporation (NYSE: PMK; PSE) is a global information services organization headquartered in Waltham, Massachusetts. Primark provides financial, economic, and market research information services to the financial, corporate and government markets. Additional information is available at www.primark.com.