India Calling!

06 Jun 2007


Forget the statistics and growth figures. There can be no quibbling with the highly visible end use benefits of the ongoing telecom revolution, writes Probir Roy, co founder, Coruscant Tec and Paymate.

If indeed anyone were to be cynical with ''India shining'' or ''10-per cent per annum growth'' slogans, then one area there would be no such quibble is acknowledgment of the impact of telecom on everyday life of the migrant labourer from Bangladesh, Nepal, interiors of rural India, the shoeshine boy in Haryana, fisherman in Kerala, you, me and the upscale corporate chieftain

The end use benefits of the ongoing telecom revolution (one-fifth of India is now digitally connected in some way) has clearly and quite visibly demonstrated increased economic growth and promoted market efficiency – all within a decade.

The classic documented case being a recent Harvard University study showing how the introduction of mobile phones amongst fishermen in Kerala has helped reduce fish catch wastage from 8 per cent to zero, increased profits for fishermen by 8 per cent and dropped prices by 4 per cent ! All because the ubiquitous cell phone now allows the fisherman to call the different landing points while he is still out at sea and take stock of the catch available for sale at each point and land his craft where he is reasonably certain of a better price. Higher profits mean that phones pay for themselves within two months.

Or take Celtel Mobiles''experience in the poorest regions of Africa where it employs more than 170,000 people. According to the Economist, its presence "creates ripple effects…which promote entrepreneurship and economic activity".

The conclusion, a chief economist''s dream, "Information makes markets work, and markets improve welfare"

If one were a keen observer of telecom growth in this country (as indeed I am) and used the barometer of seminars, conferences, roundtables, etc as an indicator as to how this sector has matured. Then one will find that predominantly telecom conferences, etc, have focused on infrastructure, scarce resource allocation, equipment and devices. In essence they have been vendor and engineering driven. And rightly so. The better part of the last decade has seen penetration of wireless and other related infrastructure literally dot the skyline and surrounding landscape by way of open conduits, ditches, dug up roads, sidewalks and unending haphazard criss cross of wires!

The next phase of the telecom revolution will now consist of three key drivers.

First, most of the time VAS has been the last token session or topic of the seminar or summit!

This has to and will change. VAS will become the most predominant revenue and margin driver for operator survival. There is now clear recognition within senior owners / managers that with commoditisation of voice and declining ARPUs (average revenue per user) all forms of VAS, whether it is office applications to consumer entertainment and interaction from the simple person-to-person SMS to interactive rich media and mobile payments will be the buffer in the short term and the cash cow in the long run (estimated to account for up to 60 per cent of operator revenues in next decade of growth).

Obviously the business rules for this will change and operators realise that they need to create an ecosystem of VAS partners like the NTT DoCoMo model (100,000+ partners) by not only sharing more revenue with them but also accruals in a more accurate and timely manner. This will help incentivise businesses to create desirable applicationss and content.

Ultimately carriers are not in the content or software business. They should it open it up to all others and will themselves see an explosion in services they will be able to offer to their increasing discerning users. The next killer application (after email and chat) in the digital space will emerge from within the suite of such VAS.

Second, the emergence of next generation networks and access devices whether they be wireline (IPTV / digital cable), wireless (WiMax / WiFi / Zigbee, HSDPA / LTE, UWB, NFC or satellite (DTH / DVB-HS) will once again change the rules of the game and give consumers a bewildering hodge podge of technology options as to how they talk, view, share, interact, search, shop and pay and enhance their sensory experience. The landscape of consumer choice and price will broaden penetration of telecom touching at some level most part of Indian households in the next five years.

Finally, the last big issue, which hitherto has been given short shrift, will be customer care, retention and overall quality of service at the end use touch points. This current format and culture still does not as yet hint to that but will need to programme itself.

Number portability opening up of more licenses and entry of new players including mmobile virtual network operator or MVNOs will necessitate carriers to differentiate themselves over and above the 4 P''s of marketing. This will be of great importance. The customer retention value is way below the customer acquisition cost in a hugely price sensitive market fragmented by many players and even more wannabees.

I have been a loyal, high value customer for my operator for 10 years, but would easily consider a shift if I can carry my number to another carrier and perception of benefits mitigates cost. Unless, of course I feel that I am being looked after adequately by my current carrier.

The author is vice chairman, Internet & Mobile Technical Committee of the non profit Media Research Users Council (MRUC), and Member, Indian Merchants Chambers Technology Committee


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