Telecom companies (telcos) would ring in this New Year with more subscribers. Having learnt a lesson or two from the tumultuous response to Tata Teleservices’ non-stop mobile tariff plan, Airtel and Hutch launched lifetime validity schemes for just Rs 999 for pre-paid customers to garner more subscribers.
Mr Naveen Chopra, corporate vice-president (group marketing), Hutchison Essar, says, "This innovation will bring a significant change in the mobile industry. Going mobile will now become more affordable. A reasonable one-time entry cost combined with low denomination, full talktime recharges thereafter will encourage increased adoption of mobile telephony." Affordability is the mantra with which the Indian customer is being lured with, but it may lead to another play being re-enacted — much like in October-November — when almost all the industry players, including Reliance Infocomm and Idea, joined the "two-three year validity" scheme bandwagon.
On the latest Hutch and Airtel move, an industry analyst said, "Tata Tele has had an excellent November when subscribers roped in through its non-stop mobile plan trickled in. Its market share improved from 1.5 per cent to 4.5 per cent. Other players joining the lifelong validity scheme cannot be ruled out as numbers matter before the fiscal-end." It is a veritable tariff game being played out there but the average revenue per user for Telcos continue to be the lowest in Asia.
"Even as cellphone usage is high, the ARPU of Telcos is the lowest in the region," says the analyst. With ARPUs at less than Rs 361, India is the only country in Asia which has a single-digit ARPU. As a result, Indian players are suffering from increasingly thinner margins and lower profitability. However, the pre-paid market is still lucrative with a huge market in tier II towns to be tapped. Not surprisingly, the industry average of pre-paid to post-paid connections is 70:30. And with cheaper tariffs being offered, the market is on a growth curve.
"During the second quarter of the current financial year, 7.67 million mobile subscribers were added as compared to 5.16 million in the first quarter. This growth is due to cheaper tariff plans bundled with dipping prices of mobile handsets," adds another industry analyst.
Mr Naveen Chopra, corporate vice-president (group marketing), Hutchison Essar, says, "This innovation will bring a significant change in the mobile industry. Going mobile will now become more affordable. A reasonable one-time entry cost combined with low denomination, full talktime recharges thereafter will encourage increased adoption of mobile telephony." Affordability is the mantra with which the Indian customer is being lured with, but it may lead to another play being re-enacted — much like in October-November — when almost all the industry players, including Reliance Infocomm and Idea, joined the "two-three year validity" scheme bandwagon.
On the latest Hutch and Airtel move, an industry analyst said, "Tata Tele has had an excellent November when subscribers roped in through its non-stop mobile plan trickled in. Its market share improved from 1.5 per cent to 4.5 per cent. Other players joining the lifelong validity scheme cannot be ruled out as numbers matter before the fiscal-end." It is a veritable tariff game being played out there but the average revenue per user for Telcos continue to be the lowest in Asia.
"Even as cellphone usage is high, the ARPU of Telcos is the lowest in the region," says the analyst. With ARPUs at less than Rs 361, India is the only country in Asia which has a single-digit ARPU. As a result, Indian players are suffering from increasingly thinner margins and lower profitability. However, the pre-paid market is still lucrative with a huge market in tier II towns to be tapped. Not surprisingly, the industry average of pre-paid to post-paid connections is 70:30. And with cheaper tariffs being offered, the market is on a growth curve.
"During the second quarter of the current financial year, 7.67 million mobile subscribers were added as compared to 5.16 million in the first quarter. This growth is due to cheaper tariff plans bundled with dipping prices of mobile handsets," adds another industry analyst.