Future of Postpaid Market in Pakistan

ufone_postpaidIn Pakistan, it’s been long time that we have not seen longer investments in the post-paid segment of Telco market of Pakistan. The main reason for ignoring Post-Pay market is ARPU and “instant payment as You Use” and list goes on…
The future of Pakistani Telco market is vulnerable (for postpaid segment at least) and will not be opportunistic in any sense to cellular mobile operators. The main reasons for not having confidence on Post-Paid market in Pakistan are:

  • Bad Debts
  • Cost of Recovery Resources
  • Customer Loyalty cost is High
  • Lack of vigilant billing systems

Bad Debts:

Bad debts are always primary interest to Telco’s in postpaid segment of market. Because, most of the customers refused to pay bills or if they pay bills they pay lump sum amount to recovery agent and deny paying any further dues for using services of any particular mobile operator.

Cost of Recovery Resources:

Cost of recovery resources include: human resource hiring, T.A / D.A etc to build efficient recovery resources in the city and in fact this include all over Pakistan. Telco’s are no more interested to invest in this context of their company resources, because when they compare these resources with prepaid investments , cost might equal to a launching a service in prepaid segment as compare to postpaid recovery resources development, where especially, they are not even sure that users will pay the complete amount or vice versa.

Customer Loyalty cost is high:

The cost of customer loyalty is too high in postpaid segment, because postpaid customers are mostly corporate customers and building loyalty for them is too expensive, because corporate sector has separate attitude to deal with.
Deals like Loyalty Cards discounts, lunch / dinner discounts, travelling air tickets discounts are always handled by redemption of redeem points. But these redeem points are again extra cost to company and when company compares this prepaid segment as cost goes significantly high.

Lack of Vigilant Billing Systems:

The billing systems are too weak to provide customer about their updated (real time) information of their usage and mostly customers get charged invalidly. Billing systems like convergent billing systems provide facility of charge customer in actual usage. But again unfortunately, Telco’s are not interested to invest in billing systems as postpaid market overhead is more than prepaid market.

I believe that postpaid segment will not see an end by any of the mobile operators in Pakistan, but there will be no heavy investments in this segment of market except smart solutions offerings like “BlackBerry” or “Mobile 2.0”, where Mobile 2.0 will take almost more than half decade in Pakistan to be adopted by corporate sector.

As it is said by some expert “that every difficulty comes with opportunities”, so if any of mobile operator invest in this segment intelligently in a way that they are able to flourish the market in a way like prepaid is on its peak, for sure they will reap the fruit.

There is a strong rumor in the market that one of multinational mobile operator in Pakistan is working on grasping this opportunity, Let’s See what Happens!!