Posted by: Olga Kharif on April 2, 2008
Up till now, we could only get prepaid phone cards and prepaid cell phones. Now, the idea of prepaid broadband access is taking off. Starting in May, start-up Xanadoo will start offering WiMax broadband access as a prepaid service. An outfit called Slingshot will roll out prepaid broadband service beginning in June.
I think that’s a great idea, and one that may appeal to a lot of different market segments, from retirees and students to people who are watching their spending. Users would be able to easily turn off their service when going on vacation, or when spending the winter in Florida. College students will turn off broadband while heading home for the summer.
While mainstream broadband providers do have special offers for students and migrants already, they’ve not yet done a good job marketing them. And their customers still have to sign long-term contracts. I’ll take a broadband service without a contract any time — if the price is right. And prepaid service providers’ prices promise to be only slightly higher vs. traditional cable and DSL.
Prepaid broadband players have to prove that they can make ends meet, however. Most users of prepaid services are budget conscious. While prepaid wireless service providers like Virgin Mobile are still around, many of its rivals have gone under in the past year. Only today, prepaid wireless service provider Movida Cellular filed for bankruptcy. Will prepaid broadband providers fare better? We’ll have to wait and see.