In August 1999 MagtiCom erected a new billboard in Liberty Square. The billboard, 200 m2 in size, is one of the biggest in Tbilisi and has attracted attention from the very beginning. It advertised a small card, newly designed and named MONO: a new thing for everybody and a messenger of new, prepaid card system in the mobile communications business in Georgia.

We were unable to find the company who first introduced the small cards with nominations of different amounts, distributing them to sell its service. Yet modern service industry is unimaginable without such cards. Prepaid cards are used in various fields of services worldwide including mobile communications, international telecommunications and the Internet service.

Many people will ask why there was such a universal boom in the popularity of prepaid cards. The answer is not so simple. One of the main reasons was that the prepaid system proved to be profitable and acceptable for both service operators and subscribers.

Let us begin with the prepaid platform: it is a complex technical system with expensive hardware and software, whose combined operation ensures real-time calculation of the subscriber’s balance, disconnection as a result of exhausting the advance and immediate reconnection upon the depositing of money in the account. The reconnection operation, like all of the others, is fully automated in the prepaid system: the subscribers dial a unique code given by the prepaid card on their phone, and the amount equivalent to the card price is immediately transferred to their account. Full automation of the system rules out human factor-related errors, providing a 24-hour prompt service.

MagtiCom began to work on the implementation of the prepaid system in 1998, when it was quite difficult to make the right choice of the then new product. We had to select among several methods practiced worldwide and decide on the option that would best meet the needs of Georgia. The newly established system required further development in a number of areas. This was why MagtiCom studied and learnt from the experience already gained by other companies in order to come to an informed decision, though these companies had only had a limited time to accumulate such experience themselves: the service originally appeared in 1995 and was a novelty for them as well. The history of prepaid cards for GSM operators originated in Germany. The ‘D1-Club’ was the first of the prepaid cards, which were very similar in appearance to the ones we use now. In the same year the Swedes started a similar project, but as subscribers’ cards were impossible to replenish after using the full amount, the experiment of Germans and Swedes had no real success. The great triumph of the prepaid cards for GSM operators began in 1996: the Italian operator TIM launched prepaid TIM cards on the market. The product was a sensational and unexpected success: 600,000 cards sold within three months. This success made many skeptics change their way of thinking and attracted the attention of other mobile companies. Cards began to be distributed in other European counties: Portugal by Proximem (Pay&GO), Belgium by Mobistar (TempoCard), France by France Telecom (MobiCarte) and many others. Asia was the next continent in the triumphant progress of the new system: "Speak Easy" of UAE operator Etisalat was the first card to be used in the region.

Today prepaid cards are offered by hundreds of operators worldwide. According to May 2000 data, the prepaid system has already up to 70 million users, which is approximately 30% of the total number of subscribers worldwide. We should mention here that some of the operators prefer to offer the prepaid system exclusively.

Having introduced the prepaid system, the world has settled on using this simplified type of service. The system lets the user avoid a number of problems such as wasting time by visiting customer service offices. Even the aspect of advance payment of service charge, which seemed negative at first, was appreciated by subscribers. The reason for such appreciation was that the prepaid system protected the user from unexpected charges at the end of each month, the service also offered the user a certain degree of control over his expenses for mobile usage.

MagtiCom was the first GSM operator in Georgia to offer the new system and face the problems associated with being a pioneer. Like any novelty, prepaid cards did not meet with general approval, and some psychological difficulties were initially encountered in using the cards, but we can already say that the experiment conducted by MagtiCom has been a success. Most of the subscribers appreciate the innovation, emphasizing a significant improvement in service quality.

A 5-year old system is far from being perfect, and needs further development in certain areas. The question of rendering roaming service to prepaid subscribers is not yet settled, but the main point is that the prepaid system is in the upswing, sustaining market requirements and offering ample possibilities of service to both subscribers and operators.

Time will pass, and the prepaid system will be widely accepted among GSM operators as well as many companies involved in the service industry. Many of them will be proud of the success achieved by the card system, but Magti GSM will undoubtedly go down in history as the pioneer of the introduction of the prepaid system in Georgia.