July 17, 2009 9 Comments
I was going through Rajesh Jain’s blog post where he has penned downs some ideas that the new crop of mobile operators could use, both to differentiate themselves at launch, as well as establish themselves, and get a large number of subscribers. Rajesh has himself given some excellent suggestions like:
- Focus on Data-hungry customers with a flat Rs. 99 per month plan
- Use a more open and participative VAS platform to entice users
- Open the User Profile to Third-party services
I’ve been thinking myself on how the new crop of operators (the Swan Telecom, Unitech-Telenor, Shyam Systema etc.) would market themselves, and would they take a niche or undercut prices and go for the masses. Well, Shyam has already launched as MTS (Shyam has chosen to use its JV partner’s branding straight away, so as to clear the way for a possible sale in the future I believe), and chosen to go after the masses, giving out a truckload of minutes free for lifetime prepaid. Too see a list of telecom companies in India, refer to Wikipedia.
The way I would like to approach this is to see what the shortcomings of the market currently are, and how they can be fixed, and I would probably enumerate them as these:
- Undercut prices further for the bottom of the pyramid – I think the prices at the lower end of the spectrum can go down further, and that’s because even though we are lowest cost mobile services country in the world, the distribution infrastructure has been commoditized (buying and selling prepaid credits, separate tower companies, billing systems etc.), and the lowest rung of customers that are added today, would not be as heavy users and will not occupy as much spectrum per capita. Since, currently mobile companies are more or less valued based on the number of subscribers, there will be a mad rush to acquire customers, and undercutting is the simplest way to do it. [This is already the strategy that MTS is using]
- More value for the middle tier – I think some of the mobile operators are going to figure out “one size fits all” is not possible, and there are lots of opportunities in segmenting and targeting. I personally see very unique plans applicable for companies giving out phones to their sales people, incoming plans for companies, family plans, lover plans (which already exist), college plans, children’s plans, election plans (?) etc. with a good number of VAS services that are bundled in for that target segment. Of course, this would require better content and VAS services, and hence more rev share for VAS players.
- Fanatical Support for the top tier – I think one place where the current operators are lacking is servicing the top tier really well. These are the high value consumers that perhaps constitute well over 40% of the market. In some cases like Corporate Connections, they do get enhanced support, but the large swathe of India still has many high intensity users, from SMEs, businessmen, lawyers, dealmakers etc. and some of the new operators could target these and probably charge them an extra Rs. 200 per month for extensive support and personalized services. For instance, I have an Airtel connection and my GPRS just refuses to work when I am on roaming, and I have probably spent more than 40 hours trying to find a resolution but in vain. I wouldn’t mind paying some money to get this issue resolved.
- Better Roaming (Domestic & International) – One place where most operators are lacking is good support and costs for roaming, both National and International. They cost a lot, they are painful because you can’t figure out how much you are going to be charged, and if it stops working when on roaming, you are dead in the middle of the desert. I would foresee prices in this area going down quickly, because customers of point (3) are typically also heavy users of point (4). However, this would require an India wide network, and a long distance backbone before this can be attemped, and I think Tata Docomo is very well suited for this.
- 3G and all the frills – This will be another turf fight, but I think its extremely raw now, and difficult to figure out how its going to pan out.
With all the new entrants, the media will be big winners, since they are going to advertise like mad – good news for newspapers, outdoor companies, and TV channels.
What do you think? How is the entry of the new players going to play out and what would you like them to do?