Wednesday, November 02, 2005

Tata Indicom non-stop mobile

Middle of October, Tata Indicom announced a pre-paid mobile deal, which results in getting free incoming calls for two years. The deal is supposed to be a promotional offer, applicable only till the end of November 2005.

In the general pre-paid mobile market in India, a recharge coupon has a fixed time validity. If the money is not used up within that time, unless you get hold of another recharging coupon, your phone can't be used even to receive a call. This is one of the biggest problems I foresee in the growth of the pre-paid segment, particularly amongst the low income families.

Normally, the time validity of the recharge coupons is lower and lower for a smaller denomination. Take Airtel for example. Upto Rs. 120 recharge voucher, the validity is 90 days. For Rs. 200, validity is 120 days, and for Rs. 3,300, the validity is 1 year and 3 months. Most people will probably be buying recharge coupons in the range of Rs. 200-400, which will give them validity of 4 to 5 months. With several other operators, this time period may be lower.

However, in Tata Indicom deal, for any recharge voucher ranging from Rs. 50 to Rs. 3,000, the validity of the "free incoming call" is 2 years. Thus, someone could pick up a handset (lowest on offer Rs. 2,499) and then buy a Rs. 50 prepaid coupon. He has a phone working for the next two years, which can at least receive calls. It is a great deal for several low income families, poor students living away from homes etc. They can always be contacted by others.

I saw in a TV commercial yesterday that this offer has been extended also to Tata Indicom's Walky, a fixed wireless terminal. This is an even better deal, since the cost of the handset would be lower (I have to verify this), prompting more lower income households to go for this phone.

I also read somewhere, but can't now locate the URL, that GSM phone companies have complained to TRAI that this offer is predatory on the part of Tata Indicom. Tata Indicom is number six in the game - after Airtel, Hutch, Reliance, BSNL, Idea. They have to be predatory or else they will be destroyed. This is the only way, they can grow their market share. It would also show the way for established market players to increase the mobile phone penetration.

5 comments:

  1. Badri,

    BSNL Cellone have one good offer of giving post paid to all Govt employees for Rs.100/- monthly rent. I think, it will be very useful for them to get unlimited incoming calls for a monthly rental just for Rs.100/-.

    For outgoing calls, they can make it from their office itself :-)

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  2. Give it a thought -
    http://sufferingsocrates.blogspot.com/2005/11/enough-is-enough.html

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  3. Tatas seems to be utterly confused. They have a presence in both GSM and CDMA and they don't know where to put their money.

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  4. Kaps: I think Tatas are getting out of Idea, in a way. Now, after Cinigular's exit, Birlas have the majority stake. Indian Rayon chief is trying to run the show there, I think.

    So Tatas have clearly looked at CDMA as their future when it comes to mobile.

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  5. Indian Express has an article on this -
    http://www.expressindia.com/fullstory.php?newsid=57917

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