Monday, January 02, 2006

The race to the bottom, Indias cellphone providers...

This is something thats been written about a lot. Indias mobile phone revolution. Now they have all begun a race to the Fortune at the bottom of the pyramid. The first one off the blocks was Tata Indicom with its 2 year free without recharge. Close on the heels of Tatas Indicom announcing a 2 year free without recharge, the other service providers have got into the act.

Airtel is offering a lifetime incoming free or a 3 year free incoming on their phones. Not one to be caught napping, Reliance is offering a similar scheme. As is Hutch. First it was pre paid cards which forms the biggest segment of Indias telecome revolution, then it was micro recharges ( as low as 10 rupees, I USD = approx 45 INR) and now its about keeping customers hooked onto networks. Now, if only they could decongest their networks so that the overall quality of the service increases.

Right now, the joke is that all the people you see on apartment balconies are actually out to "catch the network", which is not so good within walls.

2 comments:

Paddy said...

I think this is akin to the Airline Industry. The industry was thrown open to private players without developing the infrastructure earlier. Now the airlines are facing a situation of lack of parking bays, longer time before taking off - leading to larger fuel cost etc.

The telecom faces the same situation, spectrum was never freed by the defence forces and now with penetration increasing the signal reception are going from bad to worse. Having said that, probably telecom is a good example of opening up of a sector has worked well for the industry as a whole.

The underlying problem still remains, improve the infrastructure before you open-up/privatise.

Neelakantan said...

In India profit works. Show private entrepreneurs a route to profit and they will get it done. It is the case since the licence raj, only difference, now there is more competition and hence the customer somehow benefits.