7-Eleven has become the first US retailer to develop its own prepaid wireless product after assigning Dallas-based Ztar, a mobile virtual network enabler (MVNE) to manage its prepaid wireless program. Users of the new prepaid phones can recharge their accounts using scratch cards that are available for purchase at participating 7-Eleven stores, in denominations of USD25, USD 50, USD 75 and USD 100. To begin with, 7-Eleven, which has sold prepaid top-up cards from other cellular providers, will offer its new prepaid product in 1,400 stores, with a view to extending to most of its 5,300 stores by July 2004.

Prepaid subscribers account for almost 11 per cent of all US cell phone users, and in 2003, Morgan Stanley published a wireless telecom survey indicating that prepaid services could generate a 1 per cent incremental revenue growth through 2006, which equates to USD 6.3 billion. Analysts also predict retailers like Wal-Mart, Costco, Kohl’s and Home Depot, to follow 7-Eleven in offering their own cell phone products, after selling top-up cards on behalf of national carriers. As Yankee analyst, Adam Guy, notes, US prepaid mobile users want “convenience, simplicity and competitive pricing”, and 7-Eleven is striving to meet this need.

In 2003, almost half (49 per cent) of prepaid wireless subscribers in the US cited the ability to manage costs as their main motive for choosing a prepaid account, according to Guy. US wireless operators are aware of the potential to attract underserved segments such as teenagers, or individuals lacking sufficient credit history for a postpaid account, who comprise 20 to 25 per cent of the US population. With 6 million customers frequenting 7-Eleven stores daily, the retailer is confident in the sales potential for its prepaid wireless program, particularly as competitive pricing is available for international calls.

(Baltimore Sun)