From a consumer point of view, it is very easy for users to understand what they are buying and paying for.
Just like groceries, when you buy say oil, or rice or lentil, you are buying up front and then use it over the coming days. The very same consumer purchasing mentality was applied to the pre-paid service. It solved a whole series of problems. Most of the consumers are poor. They don’t have credit or credit reporting agencies. Most of them live pay-check to pay-check. Many are on daily wages, etc.
It would have become an enormous task to extend credit (which is a collection liability) and then also have a very large amount of resources dedicated to collections.
With prepaid service, the telco sits on consumer’s cash. No collection, plenty of float money, no need to change consumer thinking and no long drawn contracts management system.