Telecom service providers in the country are fighting one of their fiercest marketing battles?there?s cut-throat competition to garner more subscribers?leading to a scenario where there?s hardly any difference left between say a marketing director and a sales executive! The reason for such a fierce fight is the growing number of service providers?each is also spreading on a pan-India basis. The economics of mobile telephony is penetration?garnering more users to offset the low realisation coming from each user. There?s a big market out there with penetration level being only 30% but the problem is that urban penetration has reached a high of 80% from where the maximum usage comes.
Statistically speaking, India is the most crowded market in terms of mobile operators. We have 6-7 operators per circle compared to maximum 3-4 national operators in most developed markets. Once the new licensees, who were given licences last year, start operations we would beat our own record by having 18 operators per circle.
Going forward, there?s going to be a major price war in the voice segment which would only dent the margins of operators considering that average talk time is also on the decline because of more and more rural users coming into the net with schemes like lifetime validity.
So, what should the operators do in such circumstances? This is the perfect time to shift gears to the non-voice segment?what is popularly known as value-added service (VAS). So far, the share of non-voice revenue is only 10%, including the SMS. There?s immense scope to induce the urban user into more data-related usage which can be priced at a premium.
With mobile phones becoming a kind of one-in-all device for the upmarket, young urban professionals this is the time for mobile operators to focus innovatively on VAS. Device manufacturers have already realised this and are today offering more solutions rather than just handsets. It?s time for the operators and device manufacturers to collaborate and come out with applications so as to focus more on creating the VAS market rather than to keep fighting the voice war.
?rishi.raj@expressindia.com
