When we look at the evolution of cellular telephony services in India, it has been a story of rapid growth in a comparatively brief period, making it one of the fastest growing markets of cellular services. But the marketing people, faced with severe problems of churn and low Average Revenue per User (ARPU), have to invent and find new ways of revenues all the time. In cellular services, retaliation from competitors is very fast and first mover advantage is almost zero. Also, cellular service providers are now looking at the efficient uses of technology in order to gain more profitable customers and thus aim at long-term sustainable growth.
Telecom companies, specially the Cellular Service Providers (CSPs), are basically selling a virtual or intangible product which does not need, or to be specific, cannot have a manufacturing backlog. This is because any of the special offers by competitors have to be matched within a few days or even hours. So, once a service provider introduced lifetime prepaid offer, all the companies started providing it; a price cut in any product segment (like prepaid service, roaming etc.) is announced by all the players one after another. So retaliation from the competitors is very fast and hence, there is hardly any first mover advantage. It is totally a different scenario from the FMCG products in this respect, as any FMCG product needs days and sometimes weeks to be introduced into the market, while in comparison, the products or services of the cellular players are introduced at a lightning speed. Also, once a particular service offering is fancied by the users, the use of it spreads like wildfire. It can start as a fad but end up as a trend e.g. SMS, Lifetime Free Prepaid offer etc. Innovation and retaliation (from competitors) go hand in hand for the CSPs and efficient use of technology is a necessary to grow and maintain growth rate in the market.
A big problem for CSPs is that it is difficult to test market a cellular product or service offering. Hence, marketers are the people who actually create the need for customers or the cellular service users instead of the need coming up in the so-called consumer surveys. Innovation is the key to success in the cellular telephony market. The best example of this is Short Messaging Service (SMS), which is now a major revenue earner for all cellular operators. Some companies introduced it as a free option, but now the marketing capabilities of SMS are immense— through SMS one can create awareness and promotions (e.g. film promos and clips, advertising tunes, logos, contests, chat with celebrities etc.) and even sell products and earn money (e.g. book tickets for films or a seat in restaurant, news service, astrology services, song & tune downloading, mobile banking etc.) See Exhibit. |
