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Five Disruptions in India’s Mobile Industry: 4 – Voice Competition

November 2nd, 2009 · 6 Comments

The past few months have seen voice tariffs fall across the board – along with the market caps of India’s mobile operators. Given that we have no shortage of well-funded new operators desperate to reach targets of million of subscribers, the only option is to cut voice tariffs in whatever form. Incumbents have little choice but to respond.

Interestingly, competing on voice tariffs only benefits consumers. If one operator launches a pricing plan and it works, other operators have to match it. But cheaper voice only increases churn among the middle and bottom of the pyramid — which of course is still very large in India. Voice competition does not provide a lasting competitive advantage.

Mobile operators have to look ahead to a world where voice will be a fixed-price commodity – we will pay maybe a maximum of Rs 200 per month for unlimited talk time. They have to think of what they will then offer on their network to generate more revenue from their subscribers. And if they think it is going to walled-garden VAS, they will need to think again!

Tomorrow: VAS Competition

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