The Indian telecom space has seen over one decade of private enterprise spurred on by rapid advances in the telecomputing arena . The tele density having grown from a mere 2 percent has risen to over 47 percent as we speak in just over 12 years. The miscalculations about the purchasing power of the huge Indian middle class in other sectors of industry have gratefully bypassed the telecom space. On the contrary the middle class has proved to be the greatest supporter of growth in Indian mobile telecom industry.
There is however a great flaw in the planning and resource allocation process in the country. The scarce resource called spectrum has been the one bottleneck causing distress to all the operations …the trade off between capex and spectrum clearly was elected in favor of spectrum and its rather inefficient use in light of the competitive landscape has made matters even worse.
We stand at this juncture where bidding for 3G has been threatened by lack of spectrum amongst other issues and it may not be incorrect to assume that if we slip another 12 months 3G may just not enter India and we may jump to 4G or some other landscape.
The current operators are eyeing 3G auctions not with any major 3G perspective but with a view to augment their spectrum crunch in the 2G applications. Let us pause for a moment and consider …Who is it that the industry is trying hard to woo and bring technology to help and improve the experience of – Is it the corporate citizen of India or is it the urban housewife or the rural user?
Appropriate technology is a phrase that has been the cliché of many a captain of Indian industry, in the telecom space. The simple entity called the handset itself is a challenge to more than 50 percent of the using populace. Not more than 5 percent of the features available in the most basic instruments ever get to be used in the user domain.
Having said that, it is very important to point out that the connoisseur of technology in India is way ahead in absorption than his western counterpart and in terms of numbers far outnumbers the total markets in some countries.
We all know that Indian markets react very favorably to disruptive pricing and technology intervention. Also the consumer, the end user is immune to the backend and is solely concerned with the experience and the ease of operation in any event be it a handset operation or a complicated mechanism of transacting business over a mobile network.
Future vision for the industry:-
I believe we in India, are approaching a more than stable percentage penetration participating in the potential market.
The market segments that need diverse handling are the corporate enterprise, the upper end individual, the urban middle class which is upwardly mobile, the urban low end worker and the rural consumer.
Each of the above needs a different handle to crank.
There seems to be a complete lack of understanding of customer behavior and the socio political ethos on part of the private telecom sector in India , they seem to be metro centric in their decision making and product management.
The country lives in semi urban and rural environs and it is unfortunate to see product offerings by all Telco are heavily biased towards the corporate and urban elite. While it is a fact that the bottom lines need to be protected and assured ARPU emanates from the urban elite, it may not be out of place to indulge in some out of box thinking and shift the paradigm completely. A disruptive intervention is needed to spread the base wide and alleviate the lives of the masses while making healthy returns for all providers in the food chain.
Telcos are looking to enhance wallet shares through offerings such as voice sms , caller tunes, wallpapers ,music and clips. While these are widely accepted worldwide application ; their relevance in the Indian market is only limited to a few. Where marginal ARPU is southwards of Rs. 100 pm a Callertune subscription at Rs.30 is unlikely to bite more than a small percentage. Indian telcos are satisfied with 10 percent penetration or so it seems.
In my view the lowest common denominator is the marginal customer with a Rs.100 average spend. What can be done to make life simpler for this individual? It is rather self defeating to compete within the industry , a share of the wallet must necessarily be increased by taking away spend from some other activity say travel or newspaper or middlemen expenses for trading , education, so on and so forth.
Communications or telecom has always led the growth of economy in most parts of the world even if there is no direct relational formula in evidence. From an entertainment focus to an infotainment focus is the major shift desired which shall enhance productivity .
A longer term vision towards the telecom industry will show us that the goose laying the golden egg needs to be kept alive and gestation periods should not be artificially shortened through aggressive down the throat marketing methods.
The competitive landscape is the fiercest in India as far as the telecom space is concerned and taking a cue from Chinese experience we shall observe that unless disruptive pricing or technology is rolled out the scale shall never be achieved for our country.
Taruna, I was recently talking to a friend who happens to work for one of the largest telecom service providers of the country. I threw the idea of inverting the pyramid at him, and the response I got from him was quite surprising. He said that the rural customer has gotten smarter to the wiles of Indian TSPs.
When you throw a sales promotion at him through schemes, offers, etc, he whips out sim cards of different providers and switches easily to the one who offers the best price. This telecom giant has tried different things (VAS, CRBT, etc) and whenever they do an additional investment, it backfires in the short run.
From a consumers point of view, I am eagerly waiting for the next paradigm shift in Indian telecom. Where broadband will be cheap and speeds will be higher than what we see currently. Although even in that scenario, I dont understand how the bottom half of the populace can generate more revenues for TSPs.
Kidakka
I wouldn’t agree any less than what your friend shared on the subject .The fact that MNP is right around the corner , this will be a magnanimous concern for all operators having a major focus on clinging to Corporate pockets for revenues. My experience and learnings from International markets , clearly defines that VAS services that can suite the requirements and needs of an average Mass Class Man will be the differentiating factor for any operator to achieve customer Loyalty.
It will be incorrect to approach a consumer with expensive entertainment anymore . The need of the hour is to have legitimate costs for essential services and provide entertainment for Free , possibly sponsored .
Thanks !!!