savramesh 37 Report post Posted April 17, 2009 Business Line Saturday, Apr 18, 2009 Despite the fact that lower tariffs have resulted in higher growth in mobile subscriber base, telecom players in the country continue to price any new service or technology they launch at a premium rate initially. Take for example the iPhone, which was launched in India at Rs 30,000 even as the same phone was being offered at a subsidised rate of Rs 10,000 by AT&T in the US. The result being that there are not too many takers for the Apple phone in the country. Recently Bharti Airtel launched a 16 Mbps speed broadband connection for a minimum monthly fee of Rs 3,000. Or take the case of state-owned MTNL, which has launched third generation mobile services in Delhi at Rs 750 a month with additional usage based charges. The same operators had started offering mobile services in the 1990s at Rs 16 a minute which resulted in very limited usage. However, in 2003-04, when the mobile tariffs started falling below Rs 2 a minute, the operators started getting the volumes. So why aren’t operators not offering lower tariffs on new services from day one? Pricing factors Operators say that pricing of telecom services is governed by a number of factors other than volume of users. “You will not find anywhere in the world an operator which started offering services at cheap tariffs from day one. It always happens in phases. This is because the operators may not have the necessary bandwidth in terms of infrastructure or distribution and marketing to manage a new service if it is launched for the masses. Therefore, they will launch a service in niche areas where they know subscribers are willing to pay a premium,” said a Mumbai- based GSM player. Cellular companies also say that while voice has become a commodity in India, the same is not true for data services. "An operator in the US is willing to subsidise an iPhone because it is sure that the subscribers in that country will use the device to access data services worth at least $70-80 a month. In India, operators are not willing to take that risk because they are not sure that will get that kind of usage from customers on a monthly basis," said a Delhi-based operator. "It is not different from any other industry. A new model of a car or an electronic device will always cost high initially. As volumes pick up, the prices do go down gradually. In the case of mobile services too, it took the operators more than 10 years to bring down tariffs to world's lowest level. It is not because they did not want volumes but it is more to do with a business model which is aimed at milking the cream first and then making it mass-based," said an industry representative. Share this post Link to post Share on other sites
savramesh 37 Report post Posted April 17, 2009 This is exactly what i wanted to discuss.. i feel with current volume, operators can actually try with low cost or tariff. especially data plans.. Share this post Link to post Share on other sites
