If we had to find an sector equivalent for the likes of Rakhi Sawant for possessing the qualities of “Being In The News”, Indian Telecom Sector would win hands down. Jokes apart, the telecom sector in India has this uncanny knack of making headlines every now and then. Be it the entry of new players, VAS service offering, the ongoing price wars and the latest being – The 3G Auction, Indian Telcos have been in reckoning.
The latest entrant in the already maddening Price War is Uninor and from the looks of it, they are in it to win it. Uninor has taken the pricing to a whole new level with its Unlimited Talk plan. The plan kicked off in Patna will offer unlimited talk value by charging a monthly rental. The pricing is pretty attractive too,
For students, the plan offers unlimited calls and chat on Uninor network for a fixed rental of Rs.38 per month.
For those who run businesses as well as for executives there is plan priced at Rs.198 monthly rental which offers unlimited calls from Uninor to any network.
Well played Uninor, really well played. Throw the per minute/per second parameters out of the equation and work with the magic word “Unlimited”. I have no doubts that the plan will definitely help Uninor gets it subscriber base jumping the roof in no time given that there is no “*” attached to the plan.
It’s understood that given the competition in the Indian Telecom space and a relatively lower ARPU, volume is critical for the operators. However, is there a forward looking strategy in place? It is a no brainer that the margins associated with these plans are not huge and what makes this whole price war thing more worrisome is the future direction of the telecom market.
Forward Looking Direction For The Telecom Market
- 3G Offering: Ok, given the unending drama ensuing the 3G auction, this might take sometime to materialize but it sure is going to happen in sometime. The centre has already gone nuts over the bids and looks all set to pocket over Rs.55,000 crore. The operators are still going to go after the spectrum like crazy and ramp up their infrastructure to get a firm footing in the 3G space. However, as mentioned earlier It is the customer (You and Me) who is going to bear the costs. This brings me to my earlier point of giving the customer highly discounted prices courtesy the pricing wars. With 3G, the target customer might be biased towards a more developed user base but even then, won’t it be difficult to pitch a premium pricing to customers having provided them near free offers in the past.
- VAS Offering: This is again somewhere co-related to the whole 3G platform which promises to offer next generation features like video telephony and the likes. Moreover, it is evident that VAS is probably going to be the holy grail of telecom operators when it comes to revenue. A huge subscriber base might come in handy but then again, when you mould the customer mindset to think that mobile phone bills are a drop in the ocean , i presume it gets difficult to target the same subscriber base to pay more even if its a value added service.
The current Price wars in the telecom space might as well be the need of the hour when every competitor is vying for whatever slice of the overall it can get. But, have the operators put in enough foresight to see the long term benefits of their pricing strategies.
What do you think of the ongoing Price Wars in the market and how are they shaping up the telecom market ?