The standard way of paying for a mobile phone service is on the basis of a minimum use of, say, two hours a month for a year. Potential customers have to provide proof of a regular income, sign a contract and have a bank account and a permanent address. But because the vast majority of rural people in developing countries do not have any of these, operators are using the prepayment system. This involves buying cards which provide phone time from five minutes to an hour. Customers can use the credit as they like over a period of weeks, and so keep control over their spending and enjoy a very cheap phone service.
Prepaid cards are widely available in local stores.
The potential market is huge. In South Africa, half of all subscribers chose prepayment, and more than half in Mexico. In Senegal in 1999, one operator for the first time offered a prepaid system as the only option. After two months, the firm had won 4,000 customers. This system has tripled and perhaps quadrupled the potential Latin American market for mobile phones, according to a study by the Strategis Group, an international telecommunications consultancy firm.