Legend has it that prepaid cellphone accounts were invented in South Africa, and went on to rule the world of low-income mobile users. The reality is that South Africa was just one among many countries where prepaid was seen as a solution for serving customers who could not get credit and so did not qualify for contracts. When it was shown that prepaid customers were often more profitable than those on contract because bad debt was nonexistent, the concept spread like a virus. Fast-forward two decades, and it is invading other industries and utilities, from travel ticketing to electricity supply. Two weeks ago, 15-year-old prepaid leader Blue Label Telecoms reported R13.2-billion in revenue for the half-year ended November 30, and R1.1-billion in gross profits. Among the staggering statistics revealed in its results presentation was the activation of 700,000 new SIM connections a month, in a depressed market, and sales of more than 30-million bulk-printed prepaid vouchers a month.If...
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