The story of the evolution of cellular telephone services in India, has been one of rapid growth in a comparatively brief period, making it one of the fastest growing markets of cellular services. Soon after the recent takeover of Hutch’s Indian business by Vodafone the country was painted red with the “Hutch is now Vodafone” campaign. It clearly gave out a loud and clear message that the telecom industry in India is growing, and going strong and all the major business groups in India made a beeline to apply for the telecom license.
During the initial years of the cellular services being offered in India, it was accessible to only the rich few who could afford the hefty outgoing and incoming call charges. Over the years the cell phone has become a necessity for the masses and today we can see a cell phone in every pocket even in those people who don’t have very deep pockets ( pun intended). The prices offered by cellular companies in India are one of the lowest in the world and more importantly the low cost structure of these companies have got a wow-evoking response from Arun Sarin of Vodafone who has decided to bring “plane-loads” of Vodafone managers to India and replicate the low-cost structure in other countries to gain a competitive edge over others.
However the marketing department which faces severe problems of low Average Revenue per User (ARPU) has to invent and discover new ways of generating revenue all the time. In cellular services the reaction from the competitors is instantaneous and hence, there is hardly any first mover advantage. It is a completely different scenario in the case of Fast Moving Consumer Good (FMCG) products, as any FMCG product needs days and sometimes weeks to be introduced into the market. While in comparison, the products or services introduced by cellular providers have to catch the fancy of the customers right away otherwise it would be ineffective. In some cases competitors have responded to the such offers by announcing their own, within a span of a few hours.
Cellular service providers are now looking at the efficient use of technology in order to attract new and permanent customers and thus aim at long-term sustainable growth. The best example is the Short Messaging Service (SMS), which is now a major revenue earner for all cellular operators. The marketing potential of SMS are immense – e.g through ad campaigns and promotions, logos, contests, auctions, chat with celebrities, buy tickets, pay bills and even the latest rage ;vote for your favourite performer. With the advent of M-commerce one can also use his/her mobile phone as a credit card to make payments for a variety of services.
Time and again, charges of predatory pricing have been leveled against the cellular companies for offers like lifetime free prepaid service. These type of offers are introduced in order to catch the market and attract more customers as every operator is trying to capture as much of the market-share as possible. Cellular services constitute one of the most popular telecom offerings of current times, along with the Internet. It has attracted a consumer segment who wants to be in touch with colleagues, friends and relatives, 24/7. The possibilities in this field are thus as limitless as the human need for social interaction and expression.