How Prepaid Billing in Italy Helped Shape the Global Diffusion of Mobile Phones

Why was Italy the first country to introduce prepaid mobile phone billing services in 1996? What was the key to its success that led seventy-five telecommunications operators to introduce prepaid billing by 1998 and accelerated the mass adoption of mobile phones around the world? This article examines why prepaid was successful in light of national policies and sociocultural shifts. Along with SMS, handhelds, GSM, and the digitization of mobile communications, prepaid billing played a role in the rapid and immense spread of the mobile phone worldwide. As an innovative means of paying for mobile phone usage, prepaid represented a departure from operators' previous mobile phone payment methods. The article argues that by overlooking the contribution of this form of payment, telephone historians, the media, and business scholars have ignored this important driver of the success of mobile phones.