India is the second largest mobile market in the world (China is the largest). The mobile penetration in the country is close to 72%, and close to 95% of mobile subscribers use prepaid recharge plans.
An interesting fact is that India has around 916 million cell phone connections, but only 312 million subscribers. This basically means that on average, each user has around 3 SIM cards.
This is because most subscribers in India tend to switch prepaid SIM cards connections based on the newest and most economical prepaid plans.
A Nielsen survey conducted recently suggests that 96% of the youth in India use prepaid packages and predominantly recharge their mobile online.
There are various reasons for such a high usage of prepaid mobile services. Some of them are
Currently, a lot of mid-market mobile subscribers prefer value added services such as broadband 3G internet, online media like images and video, caller tunes, etc.
Prepaid mobile recharge SIM connections can be bought over the counter at most mobile vendors and dealers. In contrast, postpaid connections require a lot of formalities like personal ID proof, address proof, document verification, minimum monthly payments etc.
There are also age limits when it comes to getting a postpaid connection, which puts young users like students at a disadvantage.
Postpaid connections are also popular due to increased control over mobile usage, and subscribers have the option of easily switching over to a competitor’s network if the pricing model is not favorable.