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.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.