Monday, November 5, 2012

Big Dada Bets on Big Adda

With access to content, infrastructure and mobile platform, RCom is in a position to ring in a new convergent future, believes DEVDEEP SINGH

Let’s start this story from March 2003, when, despite eight years since the launch of mobile services in the country, owning a mobile was still a dream for a majority of Indians. At that stage, Airtel ruled the market with 3 million subscribers, closely followed by the state-owned BSNL (2.2 million) and Hutch, now Vodafone, (2.1 million). But over 90% of these subscribers lived in metros. It was then, while GSM players were competing with each other that Reliance Infocomm (now Reliance Communications) decided to launch Indiamobile services on the CDMA platform. Within the first eight weeks of the launch, the company witnessed a record of 80 million minutes of usage by its subscribers. Today, as tele-density in the country has increased from 1% in 2003 to 23%, RCom, with its customer base of 38 million, just behind Airtel’s 51 million, has proved to be a success. It has changed the way service providers, customers, regulators and experts think and feel about telecom. It transformed the manner in which people think about the future of communications. B&E analyses how RCom provided the right ring tones for a connected India.

Tactic No 1: Become the price warrior

The success of RCom is significant considering the price revolution it initiated in the sector. While the likes of Airtel were offering STD calls for over Rs.3 per minute, Reliance empowered people to make domestic long-distance calls for a measly 40 paise. Although this was applicable for a Reliance-to-Reliance call, it gripped the price-sensitive nation and, by June 2003, the company amassed a subscriber base of 1.2 million. Says S. P. Shukla, President (Wireless Group), RCom, “According to Dhirubhai Ambani, a telecom business would achieve its goal if it could make mobile telephony services available to the masses at rates that were cheaper than the postcard.”

Not only did RCom implement this vision successfully, it strategically reduced the cost of owning a mobile at the entry level. With the Monsoon Hungama scheme that was launched in July 2003, RCom allowed individuals to own a mobile for just Rs.500. Such was the frenzy created that in next few months, the company penetrated deep into towns & villages & became one of the top mobile service providers. “Reliance has always offered the cheapest monthly plans. Also, their valued added services like Hello Tunes and others are cheaper than other operators. It’s a treat to be an RCom customer,” says a Reliance mobile user.


Source : IIPM Editorial, 2012.

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