Telecom Waves With prices seemingly at an alltime low in the telecom space in India, one wonders where the ball will roll next. where the price war is headed; what will follow next; and most important, whether consumers even care for such severe divisions of currencies in the telecom world - fractions that don’t even exist outside of As low as it gets The concept of per second billing isn’t altogether new. Orange (now Vodafone) had launched it a few years ago in the UK, but definitely not at the kind of price points Indian telephony is now privy to. The strategy was beneficial for Orange, as its ARPU (average revenue per user) was high.
The probability is that prices would be commoditised even further festive pricing, group pricing, pricing for family/friends and bundling of offers; alongside, crossselling with other categories, such as movies, credit cards, or earning free talk time by shopping at a mall, could also take place.
In India, however, the last three quarters show steadily declining ARPUs for telecom players. In such a scenario, there is obviously high reliance on bringing in the volumes, so that low profit margins caused by low pricing could be evened out. Price is the ultimate envelope to push for the telecom industry; and players have got it right with the ‘per second’ route. But this will only become more and more ridiculous. This could mean the ‘half paisa’ route (which MTNL has already forayed into) or ‘packet second’ routes - where a cluster of seconds are packaged together at a very low price. F u r t h e r m o r e , denominations that have gone out of vogue, such as the ‘anna’, will
The price war in Indian telecommunication industry probably be brought back. One could have communication on the lines of ‘Rediscover the value of money once again’; something about going back to the good old days when everything cost so little. The probability is that prices would be commoditised even further festive pricing, group pricing, pricing for family/friends and bundling of offers; alongside, cross-selling with other categories, such as movies, credit cards, or earning free talk time by shopping at a mall, could also take place. However, with the complexities of such tariff plans, won’t the task of communicating these to consumers become an additional headache for telecom players. As
24 | Aavishkar Dish Antenna Programme Guide |January 2010
per research conducted by chlorophyll, post-paid customers rate convenience higher than prices. But the pre-paid consumer’s mindset is a different one - such customers know all the details of various plans/bundles, both for their brand as well as that of the competition. Hence, telecom operators could come up with innovative bundles/ slabs; for instance, for a certain amount per call, one gets 120 calls free and gets charged Re 1 for the next 150, and so on. Further, telecom will continue doing what it does best - tell halftruths by projecting the larger picture, the ‘1000 minutes free’ (with conditions) kind, adds Khalap. Such low pricing, although incredible, could actually serve a