Innovative pricing to usher in 3G services rollout

Written by Rachana Khanzode | Mumbai | Updated: Sep 6 2010, 05:34am hrs
With decks clear for the launch of 3G mobile services in the country, all eyes are on pricing of these services. To woo subscribers, the offers are expected to be competitive and innovative. 3G services do not come cheap, but the six telecom service providers, who bagged 3G spectrum in the auction in May, are expected to take cognisance of the fact that betting on premium payers alone would not be a viable business model to follow.

Providing services at lower pricing will also be considered as the launch happens early next year. Last Wednesday, the government allocated air waves to private operators, authorising them to use the spectrum for 20 years from the day of allocation.

An executive said: Even in 3G, just like in 2G, high prices would guarantee speed downloads. However, we would bring in plans at lower prices that would mean speeds based on availability. That is because we cannot let 5% of the subscriber base use up 80% of the capacity. Our pricing strategy would take this into account. This is clearly based on the limited 3G spectrum available with the operators in India, he said. PwC estimates the average 3G revenue per user (Arpu) for mobile operators is expected to touch Rs 712 in 2011. It will gradually fall to Rs 265 in 2015.

We dont expect pricing for 3G services to be very high. We had launched the per-second billing last year that worked wonders for our consumers. We would be making unique offerings for 3G as well. However, these are still being worked out, a TTSL official said.

Reliance Communications, that bagged spectrum in 13 circles, said pricing would depend on services as well. Prashant Gokarn, head corporate strategy, RCom, said: Pricing for services like high definition television on 3G would come at a premium if compared to the same services on 2G network. However, services that do not have a benchmark, might be driven by market forces.