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Cambridge, MA, September 20, 2006—Low denomination vouchers have an initially positive effect on revenue, but growth slows as the competition catches up, with a risk of stagnation and even decline if not carefully managed, says Pyramid Research’s latest Analyst Insight.
“Low-denomination vouchers lower the affordability threshold, and allow subscribers to purchase airtime for as little as $0.05,” comments Guy Zibi, Director of CMT and Insight author. “Their main risk lies with a potential decline in usage and ARPU.”
The Insight found that the vouchers allow carriers to reach revenue volumes they otherwise cannot reach, at the cost of slower and slightly more unstable growth. Ultimately, Pyramid found that carrier choice is between a relatively small revenue base, but with steady, predictable revenue growth or a larger revenue base with a slightly less predictable revenue growth.
“To the extent that the larger revenue volumes come with strong margins, we certainly prefer the latter, though many investors may not,” concludes Zibi.
If you would like to learn more about low-denomination prepaid vouchers, download this Analyst Insight by Guy Zibi: http://www.pyramidresearch.com/downloads.htm?id=6?sc=vouchpr
About Pyramid Research
For twenty years, Pyramid Research has helped companies in the converging communications, media and technology industries stay ahead of market trends, understand competitive threats and capitalize on opportunities. We advise the world’s leading vendors, service providers, equipment manufacturers, and the financial community on how to implement best practices, build offensive growth strategies and drive profitability.
Press Contact:
Amalia Vega
Pyramid Research
P: 617.494.1515 ext 231
E: avega@pyr.com
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