Ideas for New Mobile Operators

The arrival of new mobile operators in India never seems to stop. In the past few months, Aircel has gone national with its roll-out, Reliance has launched its GSM service, and Tata Docomo is also going national with its GSM service. There are a few more who could still come in. And then we will have the 3G auctions for some more.So, what should be the entry strategy for a new mobile operator in a saturated circle (near 100% penetration) like Mumbai? This effectively means that instead of trying to attract new users the focus has to be on switching users.I had explored this idea a few months ago when Idea had launched in Mumbai. This is what I wrote then:

What could Idea have done differently to switch users? I think the entry strategy could have revolved only around one of two key ‘ideas’. The first, aggressive reduction of voice tariffs since voice remains 90% of the industry revenue. But they would have known that this would have been matched within hours by the others. So, it would have only ended up in taking industry revenues lower for everyone, and not necessarily ended up gaining them subscribers.  Alternately, Idea could have created a first-class service targeting high ARPU subscribers, who are also VAS (value-added services) hungry. Idea could have created an i-mode in India – a platform that could have gotten content and service providers excited, creating a positive feedback loop for the service rapidly. In essence, Idea could have thought disruptively and differently. But so far, they haven’t. They still have a golden opportunity – many of us in Mumbai are hungry for innovative mobile data services.

New operators tend to either talk of network or try and come out with aggressive voice plans. I think the network quality is a given – all seem to be the same. Voice plans typically tend to attract the lower segment. What the new operators need is the upper end of the spectrum – and they have to get these users to switch from their existing service provider. For that, the focus will need to be not as much on Voice, but VAS and Data.

I still don’t see mobile operators (new and existing) with an aggressive focus on VAS – Aircel tried to talk about the “Pocket Internet” but I am not sure if that got the message across and had enough of a differentiation.

There is a lot that can be done on the VAS side that can give new mobile operators to disrupt the pecking order and get the more valuable, higher ARPU-generating mobile users to switch. This is what I will explore in this series.

35 thoughts on “Ideas for New Mobile Operators

  1. Pingback: Ideas for New Mobile Operators

  2. You are spot-on Rajesh. I’d great hopes from DoCoMo Tata, given NTT DoCoMo’s track record in Japan but they also seem to be have gone for the obvious option.

  3. Useful thoughts Rajesh. I have one point on this. For prepaid we are billed according to the number of calls we make and we know exactly how many calls we are making as the reduction in our balance happens as we talk but for postpaid billing, why do we have to wait till the next day to know the unbilled amount? From a software perspective, I think it is quite possible for mobile phone operators to give that data to users realtime but they choose to wait. When I want to know how many of my free calls are remaining for this month, I dont have a way to know them. I think this can be improved by any provider. Of course, this will not help make me switch providers, but I want it.
    And I think the Number portability will put additional pressure on the mobile operators to makes their rates in par to other networks.

  4. I am waiting for number portability because as a customer, I would have more say. The entrenched oligopolies know they can get away with shoddy customer service.

    As far as the data plans are concerned, I am surprised that they have not found it fit to fund cheaper Internet access since majority of the users prefer it over the usual landlines. It remains a lousy alternative to landline; giving the feel of the old time dial up. Surprisingly, the landline business has not been revitalised given the spate of advertisements for “mobile broadband”.

    The whole system is rotten; since the customers have no real choice in terms of tariffs or superior customer care. I do hope that someone in the top reads and implements your suggestions.

    Further, the co branding of the handsets has happened majorly in the low end of the market to target the vast majority of the population. The real cost of ownership is much higher because the telcos try to recover their cost through costly outgoing calls. It is of course, important, but it doesn’t address the quality of the cheap imported handsets (which are cheaper to produce by thousands); on many occassions I have seen them failing after few months of usage and no real after sales.

    Blackberry hasn’t happened on a large scale unless the company execs are trying to show the crap off to the next prospective customer. Barring a selected few, I find it useless to invest in push to email since I don’t rely on their “encryption” for any sensitive email despite their claims. Their handsets are outdated anyway; with all the operators offering the “premium services” there is no differentiator either.

    Your write up is timely. I am looking forward to more of your insights in this.

  5. Pingback: Ideas for New Mobile Operators

  6. new Operators need new mindset on VAS and mobile data…Instead of Copying Internet paradigm onto Mobile –they need to look at ways to create Mobile Web that can not only win revenues but also may catapult them to be at leading edge breaking voice monopoly….Some of the ideas you can find at this great slideshare presentation:

  7. Good one! The key is to have adequate bandwidth on mobile to make it a pleasant experience. When they say 3G licences, I hope they mean HSDPA which is bare minimum required to render a decent quality video which has become a way of information exchange for most of the people. Ofcourse, it’s a no brainer that operators have to move to flat monthly charges to remove the fear in subscribers’ mind about financial exposure, as many application clients these days seem to be always transcating over the web without user’s knowledge.

  8. VAS, yes could be a potetnial different entry strategic approach of new operators however the Indian VAS market is not yet matured enough, even today also the VAS services are by push and not by pull. To keep VAS as corner stone of entry strategy, high degree of awarnees and right pricing is required. Considering the high royalty(Indian VAS is all about film songs right now) charges and higher investment in NW to give high data speed and also lower realization in voice revenue makes it difficult for new operator to push VAs service and which has been constrain for Aircel inspite of taking the VAS positioning.

  9. Pingback: Ideas for new mobile operators « kpowerinfinity

  10. I agree with Sajid that you’d need high awareness along with right pricing to increase usage of VAS services. Ringtones, Caller Tunes and SMS services have been aggressively promoted in India, but not Data. Music CDs, trailers etc in India gives you the codes and instructions to use ringtones etc. There are plenty of SMS services. And the user experience with all these value-added services can be quite consistent – no matter what handset you use.

    The Mobile net experience is not something all mobile operators can control in India, given that GSM handset manufacturers aren’t directly accountable to the operators like the US (and thank god for that!) If you use Opera Mini surfing the net can be pleasant enough despite EDGE and tiny screens. Out of the box and using the default mobile browser is a mixed bag.

    You need an ecosystem of services to really promote Data. iMode and its various Indian WAP iterations are too restrictive. You need movie theatre to tell you to hop on to the mobile version of their website to check movie timings. You need your Idea/Virgin store to help you set up email on your phone. You need better Twitter rates. And you need handsets to stop asking you to choose between Vodafone Live, Vodafone ABC, Vodafone XYZ each time a user tries to access EDGE on their phones.

  11. when is number portability going to occur in india…i’m waiting for the same….wanna switch over to tata docomo right away…been very impressed witht their plans and VAS (esp. the 1paisa/sec, pay as you go plan)!!….love their ringtone as well…on par with the airtel one!…need number portability nowwww!

  12. Pingback: Growing Mobile VAS in India: The Coming Mobile Data Revolution

  13. yup thr caller tunes has vry gud collection..also they are comin up wit new plan like diet sms n the launch of black berry ..docomo customer are havin a feast..

  14. Here’s a VAS idea with a twist: How about having low denomination airtime recharge voucher given away with grocery products as a purchase incentive? So, when purchasing a box/ bag of , say, washing powder you get a small recharge free. The washing powder manufacturer pays for the airtime and for this he gets increased sales, the networks gain because they sell more airtime and the consumer wins by getting free airtime. This concept has been set up by my company and is running extremely well in South Africa. My system works by having a recharge voucher with a single PIN number that works across all networks. I have a worldwide patent on this process and have approached most of the big VAS players in India who are not interested. If you know of anyone interested I am looking for a licencee or local partner in India.

  15. Sumthing innovative VAS is wat required but dat too becomes commodity wit al telcos going behind it. After MNP VAS wud be the differentiator..

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