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With consequences on the market structure, as a result The current article would deal ofcompetition and the innovative schemes of the players to capture market shares.
The GoIs decision to liberalize the telecom sector in 1994 transformed the entire telecom
industry, with many private companies foraying into the sector. With the consequent grant of
licenses for providing cellular services, there was a surge in the number of cellular services
providers which continued till the late 1990s. By the year 2000, stiff competition between players in the cellular market prompted each player to formulate more novel strategies in
order to retain their market share.
There are 9 major players in the market. The market is dominated by Airtel and Hutch (now
Vodafone) and BSNL over the last 3 yrs, but even for players like BPL, MTNL and Spice the
share is growing. There have been various promotional strategies implemented by the major
cellular service
providers in the Indian cellular market.
Promotional Strategies to capture market share:
Most of the promotional strategies revolve around capturing the younger generation whoformed a major part of the target market. Prominent among these were celebrity
endorsements, loyalty rewards, discount coupons, business solutions and talk time schemes.
The most important consumer segments in the cellular industry are the youth segment and the
business class segment.
The youth segment is the largest and fastest growing segment and is therefore targeted most
heavily by cellular service providers. Bharti Tele-Ventures adopted celebrity endorsement as
its chief promotional strategy. By 2007 it emerged the unprecedented leader commanding the
largest market share in the cellular service market.
Hutch implemented the celebrity endorsement strategy partially, relying primarily on itscreative advertising for the promotion of its brand. BSNL, on the other hand, attracted the
consumer through its low cost schemes. Being a state owned player, BSNL could cover rural
areas, and this helped it increase its subscriber base.
Aimed mainly at youth, Idea Goodies card will facilitate easy download of ring tones, logos,
wallpapers, games etc. It comes in two denominations of Rs 22 and Rs 55 each and offers full
rupee value to the customers. All the content through this card is available at a price tag of
almost 33 per cent less as compared to what the customers would usually pay, according to a
company press release.
AIRTEL launched special mobile packages targeted at the youth, women and senior citizens
as part of its market segmentation strategy. While women can get a new post-paid connectionwith a monthly rental of Rs 150, students will be able to make calls for as low as 50 paise a
minute from predetermined areas such as universities and popular hang outs.
Airtel has also introduced a `Friendz package for the youth whereby subscribers are allowed
to transfer mobile recharge both talktime and validity from their phone to another
phone. The package allows subscribers to form a Closed User Group of up to 5 friends and
make calls at 50 paise a minute.
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Customers opting for the Ladies plan would be able to call three local Airtel numbers at just50 paise per minute and send SMS to them at 50 paise per message, subject to a maximum of
25 messages per month. Airtel has tied up with womens magazines, offering discounts onsubscription. For subscribers who are over 60 years old, Airtel has launched the `Seniors
Plan with a monthly rental of Rs 150 which offers discount on one STD number and one
local Airtel number.
Innovative Handsets for Rural India
In India where large numbers of the rural population do not have electricity, and power
cuts are commonplace even in the cities having a torch built into a mobile phone is a
distinct and tangible benefit. The Nokia 1100 (launched with the tag, Made for India)
incorporates a torch, an alarm clock and a radio.
Similar plans are in the works at Nokias three India R&D labs. Nokia is, working on
shared phone. For reasons of affordability, in rural areas a phone may be shared by severalpeople. The models being launched to cater to this need will
have separate address books, individual billings and more. This is supposed to hit the marketin mid of 2009.
Two basic things are still missing to boom a mobile telephony market in India, and these are
network access and financially sustainable costs.
Overall growth statistics tell a compelling story: India is the second-largesttelecommunications market in terms of sheer numbers of potential subscribers, and one of the
fastest growing in the world. In late November 2005, the nation had some 71 million mobilesubscribers, more than 50 million of them using GSM networks, the nations dominant
mobile standard. And with net additions per month of approximately three million mobilesubscribers, few markets in the world can match Indias growth. But these numbers only tell
part of the story. Looking at most of the growth, it becomes apparent that the increases have
been clustered in and around Indias urban centers. And while mobile penetration has served
to catalyze business growth, a widening gap has opened up between urbanites and the 70
percent of the population that lives in the rural heartland. This is a cause of concern for
national planners. According to the Telecom Regulatory
Authority of India (TRAI), overall (fixed and mobile) teledensity in rural India stands at
approximately 1.94 percent today, in stark contrast to 31.1 percent in urban areas. As a matter
of national priority, efforts have been redoubled to address this gap in new ways other than
happened mainly because mobile tariffs became equal to fixed-line tariffs, making them
affordable to everyone. The Indian government also brought handset import duties down,
helping boost mobile penetration. This market growth has also convinced handsetmanufacturers to open production facilities in India. To lift mobile penetration rates in ruralareas, new approaches are now under consideration. that run up the cost of service to
unattractive levels.
There has been huge inflow of FDI and coupled with the government reforms and policies
which are pro telecommunication, there has been unprecedented growth in the subscriber
base in India in last 5 yrs. Due to heavy competition and favorable market, there has been a
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heavy decline in tariff plans provided by the service providers and the decreasing price ofhandset has added to the growth story of telecom. Due to coupling of all these factors, the
mobile penetration has increased even to the rural areas making owning a mobile really
affordable for a common man.
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