PREPAID CONCEPT TO BECOME NEARLY UBIQUITOUS: Fourth Quarter Boom Not Entirely Attributable to 'Credit Challenged'

Mobile Phone News, Dec 8, 1997

Prepaid cellular, a concept that started moving only last year, has taken flight recently, with large carriers such as Bell Atlantic Mobile [BEL] (BAM) and AT&T Wireless Services Inc. IT] promoting prepaid handsets and minutes as prime holiday gifts-something not under the tree last year.

AirTouch Cellular [ATI], one of the first U.S. carriers to launch prepaid service, estimates that 30 percent of cellular applicants are turned away for credit reasons. AirTouch, which drew on its success in foreign markets, now has prepaid in all of its U.S. markets. Like AT&T and BAM, AirTouch uses the C(2)C system of Boston Communications Group Inc. [BCGI] (BCG), the largest domestic prepaid platform or solution provider.

Internationally, a subsidiary of Indianapolis-based Brightpoint Inc. [CELL], Brightpoint International Ltd., leads the way. The 500- employee subsidiary recently announced prepaid agreements with carriers in Australia, the Philippines, Austria, and South Africa.

Brightpoint International CEO Dana Marlin said the company would be adding six major carriers "in the short term in Ireland, Poland, Taiwan, two in China, and one in India." Marlin said the international market is more fertile than the U.S. market because less developed countries lack the credit checking networks available domestically, a point also made by analysts interviewed for this article. "It's harder for us to demonstrate our value here in the U.S., where we'd have to bang on the door," observed Marlin. "In foreign countries, people are begging us to come in."