Tuesday, December 29, 2009

Paisa bolta hain ?

Even at the time of high inflation, where everything is expensive, Telecom operators are fighting over the value of 1 paisa. Marketers of different companies are trying their best to innovate the power of paisa in various ways.

If there is one sector that is definitely over-crowded in India it is the Telecom space. From Tata to Aircel, from Vodafone to Reliance all are locking horns against each other for a share of the Indian Subscriber. And in doing so they are taking the competition to a whole new level.

A level of competition that can be fatal to them and the entire industry.

It all started with Tata Docomo.
The domino effect made IDEA, RCom, Vodafone, MTNL and Airtel offer per second billing.
Now if that wasn’t enough MTS which is a new player cut the 1 paisa per second to half a paisa per second! Imagine what if i use just 1 second a month? How do i get half a paisa? Is there a half a paisa coin?

Latest generosity is shown by Loop Mobile. It has gone a step ahead and launched 1 paisa per 6 seconds i.e. just 10 paisa a minute charges!

I’m still wondering who would talk about better services, better coverage, free gprs etc rather than just talking about call rates. It seems like telecom services are just a commodity and no matter how much branding they do they would still fight on price.

Well where is this headed? Free calling?

I understand it is difficult to completely resist pricing pressures in a price-sensitive and crowded market such as India. However, marketers should focus on careful market segmentation and value-based differentiation.

Mistri diagnosis

As I have mentioned in one of my post (survival of the fittest) Companies like Vodafone and Airtel which increased their media spending during recession times will reap the benefits during upturn. They have capitalised that time to build brand equity.

In the coming year I recon there will be a paradigm shift with the introduction of mobile number portability ( MNP enables mobile telephone users to retain their mobile telephone numbers when changing from one mobile network operator to another.)

Calling rates will become cheaper and will be same across all the networks. With the introduction of MNP subscribers will easily be able to switch their loyalty without changing their mobile number.

It will become very difficult for small players to retain their subscribers as they will not be able to give same services as big players and will not be able to cope with low profitability caused due to price war.

The small companies will perish or will be acquired by big telecom companies. What went wrong for these small companies is the fact that everybody knows their strength i.e. using predatory pricing to attract subscribers and unfortunately it will go against them.

If you know your strength it never becomes a weakness. If the market knows your strength then it becomes a weakness.

Author: Sanjay Mahar

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