August 2010

While talking about mobile connections, there is a decent chance that you have had someone tell you that the only reason for not changing their connection is that a lot of people already have their existing number. That was a problem a few years back when an additional mobile phone meant a significant expenditure to set it rolling. With basic phones, now, under Rs. 2,000 and fancy QWERTY pad decked ones around Rs. 5,000 coupled with almost free SIM card connections, the problem is not so considerable anymore. This is reflected in the Mobile India 2010 study, conducted by JuxtConsult , which suggests that around 9% of the over 650 million mobile subscribers have active multiple connections . An active connection is one which is recharged periodically (prepaid) or paid for every month (postpaid). Of course, that should sound like good news for a telecom operator but things do not seem so rosy if you delve a little deeper. The extremely fierce competition prevailing in this sector has seen rates fall from levels which seem almost obscene now. Case in point – I bought an Airtel SIM 3 weeks ago and got a SIM card with lifetime validity for Rs. 49. I bought an MTNL SIM card in 2006 and recharged a lifetime coupon for Rs. 999 over and above the Rs. 150 I paid for the SIM card! Problem for Telcos: Churn rate This is basically the number of customers who discontinue their subscription to a service. Madhusudan M, CEO of Virgin Mobile pegs this between five and six percent and increasing rapidly. The speed with which this market grew (and is still growing) and competition that exploded on the scene brought forward some marketing strategies that might have set the trend of using one steady mobile connection and another to suit the pocket. Distributing free SIM cards, very attractive network to network calling but not so much when it goes outside the network, focusing on certain regions to enhance service while neglecting others, free daily SMS and call minutes, etc. These strategies scream “selective use”. My friend uses his Vodafone postpaid to send out free messages (daily quote of 200!) and not the Airtel prepaid because Airtel charges Re. 1 for the first SMS of the day. I, myself, keep MTNL only because in Mumbai the rates are seriously cheap even if the network is weak. Location is a major factor for possession of multiple connections. Some services provide good rates for local calls while others do that for calls to their network anywhere in India. That is a major boon for people who spend considerable time in more than one city or town. The new entrants exploit that, almost brutally, like Tata Docomo did by slashing roaming rates. Will this problem die down? ‘Unlikely in the short term’, says Sanjay Tiwari, CEO and Director of JuxtConsult . The inhibition is slowly fading away. People own upto three SIM cards – one for home, one for city of stay and one for friends’ circle – and are managing them comfortably. Increasing acceptance of dual SIM phones might not let the problem die down at all. Probably time for some marketing wizard to crack the market and net a fortune! Looking for a Social Media Agency? Try WATConsult – India’s Leading Social Media Agency Related Posts GSM Shows A Marginal Dip In August Subscriptions Mergers On The Cards In Indian Telecom Sector Telecom Tariff Wars Hit A New Low! October Telecom Stats: Subscriber Base At 52.56 Crores, Telecom Density Reaches 44.87 Percent Airtel, Idea & Vodafone Join ‘One Second Billing’ Bandwagon