Telstra Sells Prepaid Sims
Sydney Morning Herald
Monday May 12, 1997
IN AN apparently secret marketing move, Telstra has begun selling pre-paid SIMs (Subscriber ID modules) which cut off users when their SIM runs out of money.
The SIMs, which cost $200, have $150 in prepaid calls on them. The calls are charged at 75 cents a minute while the network access fee is $1.50 a day. Fusion, the Brisbane company selling the SIMs, said there is also a $65 connection fee to the service.
When cut off the user is able to call only two numbers, one being the emergency services and the other an 1800 number. The 1800 number operator can take credit card details from the user and arrange to have the SIM "recharged" with credit.
The move has caught most mobile phone manufacturers completely off guard since they were all in the process of pitching their own proprietary pre-paid SIM solutions to Telstra.
The technology used by the Telstra pre-paid SIMs is similar to that used in Italy. The Italian GSM prepaid SIMs work by having a computer connect to the mobile telephone exchange equipment that keeps track of how much air time has been consumed by a SIM. The 1800 operator, in the Australian case this is the Sydney-based CorpTel, then has access to the computer to change the account balance.
The total market size in Australia could be in the millions if the Italian experience is a guide. There are more than 500,000 pre-paid SIM subscribers in Italy today.
Australian mobile networks have been slow to introduce the technology as it provides subscribers with a way to otherwise control their mobile telephone bills.
Furthermore, mobile marketing executives suggest that the networks could lose control of their marketing channels and customer loyalty as users could easily hop between networks. The effect on network cashflows and telephone subsidies could also be considerable as subscribers rush to control phone bills in preference to buying apparently cheap handsets with their associated expensive contracts.
Alcatel is poised to take advantage of the pre-paid SIM market with its new ultra-cheap One Touch Easy telephone. One scenario sees this type of phone on offer at department stores already loaded with a pre-paid SIM.
The consumer simply picks up the phone, pays for it at the checkout, and then starts dialing. The advantage for the consumer is no paperwork or credit checks.
Most mobile manufacturers are pushing for Telstra to adopt a solution similar to the GSM phase 2 advice-of-charge technology. This technology uses information sent to the phone from the network to allow the mobile phone to cut off the call when the SIM runs out. Recharging the SIM with credit could be done by plugging the SIM into a bank ATM and withdrawing cash from a bank account.
© 1997 Sydney Morning Herald
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