The global mobile market is a trillion-dollar industry, with 5.1 billion mobile subscribers generating US$1.1 trillion dollars in 2018. Prepaid airtime takes the majority of that market, accounting for 71% (5.7 billion) of all global mobile connections. That share is still growing, with prepaid airtime estimated to reach US$659.1 billion in market value by 2026, expanding at a compound annual growth rate of 4.3%.
Low and middle-income countries (LMICs) make up a significant portion of that growth. Of the 710 million new subscribers from now until 2025, half of these new users will be from Asia-Pacific and a quarter from Sub-Saharan Africa. Prepaid airtime adoption is high in LMICs because it can be purchased in small, variable quantities only when the user can afford it.
Prepaid usage in LMICs goes beyond airtime minutes. Mobile is often the only method of accessing the internet, which means their prepaid connections also provide them with the social and economic benefits of digital inclusion. In some countries, airtime is used as money; in Egypt, Ghana, and Nigeria, airtime is treated as currency and can be spent in shops, sold for cash, or transferred to settle small debts. As early as 2002, mobile users in Kenya were purchasing and reselling airtime or using it as a savings account; in 2013, seven out of 10 of Kenya’s poor had cut down on food expenses to save up enough money for airtime and “would rather go hungry and walk to work than be short” of it.
With the COVID-19 pandemic negatively affecting economies and consumer spending, more people are turning to prepaid airtime as a way to cut costs. In Australia for example, amidst its first recession in 30 years, the number of mobile users turning to prepaid mobile plans continued to increase in 2020. Prepaid mobile operators are now “in a prime position in a financially constrained environment”.
Sources:
- Stryjak, Jan and Sivakumaran, Mayuran. (2019, February 25). The Mobile Economy 2019
- Barton, James. (2019, February 13). Juvo and Strategy Analytics highlight prepaid churn in new report
- World Bank Country and Lending Groups
- Singh, Vishakha. (2021, January 24.) 3 must-know growth tenets from prepaid mobile success
- Bahia, Kalvin; Suardi, Stefano. (2019, July 16). The State of Mobile Internet Connectivity 2019
- (2013, January 19). Airtime is money
- Piper, Kelsey. (2020, September 11.) What Kenya can teach its neighbors — and the US — about improving the lives of the “unbanked”
- Kinuthia, Keziah. (2018, October 10). Mobile loan consumers spending more on airtime than some key basic needs
- (2020, August 17). Pre-paid mobile phones gain satisfaction edge for first time
–
For more updates, follow us here on Medium or join our XLOAD communities to get the latest news on The XLD Token.