Indian telecom industry after its market
liberalization and growth since 1990s has become the most competitive and one
of the fastest growing telecom markets in the world.
The Industry has grown over twenty folds in just
ten years, from less than 37 million subscribers in the year 2001 to over 903
million subscribers in the year 2013. India has the world's second-largest
telephone user base with over 903 million users as of Dec 2013. It has the
world's third-largest Internet user-base with over 198 million as of Dec 2013.
Telecommunication in India has supported the
social & economic development of India and has played a vital role to
narrow down the rural-urban digital divide to some extent.
As per the current market situation India
consist of around 200 Million internet subscribers out of which 180 million
subscribers use it on mobile phones. Out of 180 million mobile users only 67
millions use it on Smartphones & others use it on the feature phones.
In current technological scenario India is well
equipped with the upgraded 3G services in the lights of services provided by
Vodafone, Idea, Airtel & other major operators but most of this networks
are underutilized due to low rate of upgradation from 2G to 3G.
The penetration of 3G is around 7 percent of the
total wireless subscriber base in the country and the picture is not as rosy as
it appears.
Major challenge for Indian telecom industry today is
to increase utilization of 3G services & get ready for upcoming 4G
upgradation. To upgrade people from 2G to 3G services telecom companies are
taking major steps by lowering 3G data prices & increasing 2G data rates
reducing gap between both of the services & expecting people to upgrade
into 3G. It’s been long time since the launch 3G; it has been underutilized
& created financial debts in companies who have invested in 3G
infrastructure.
It is necessary for all the major service providers
with 3G/4G services to upgrade their users & attract new cutomers from 2G
to 3G/4G for which some concrete steps are needed to be taken.
Recently we conducted quantitative research in Mumbai
with 250 random samples of users, in this research we tried to understand what
it will take for the telecom companies to upgrade their customers from 2G to 3G
or 4G services.
Preference of 3G over the 2G services
From
the above Charts it can be observed that 55 percent of existing 2G subscribers
are willing to switch on 3G services.
From
the age group of 19-30, 57 percent of the existing 2G customers are not willing
to adopt 3G services with the majority of them giving reasons like high cost
& high satisfaction with current 2G services.
For
19-30 age group customers, High Speed Internet is on top most priority followed
by whatsapp media sharing & quality of network with price in consideration
of 3G.
Views of existing 2G customers who are not
willing to upgrade services
55.17 percent of customers said that they don’t
switch to the 3G services from the existing services because for many of them
high cost of 3G is major concern & many of them feels satisfied with the
current 2G services.
Views of existing 3G customers
On the other side the customers who are already
using 3G service users, prefers 3G services over 2G because of
below preferred attributes.
For the customers who prefers 3G services,
attributes like Network quality, High speed internet, Media file sharing,
Connectivity with PC, Skype & Video streaming are more important than that
of its concern for price and video calling feature.
Video calling features offered by operators is
considered less important than that of the video calling services through OTT
service providers like Skype & Tango. The major reason for this may due to
lack of ecosystem with front facing camera phones, & the less number of 3G
customers.
Customers seemed to be neutral to
speak about HD live gaming & Live TV. May be because in India still
ecosystem is not ready to attract people for using such kind of features.
Above statistics raises the biggest question for
the 4G launch "Can 4G services attract such price sensitive &
quality conscious customers?" " Will 4G succeed in India or will
create an additional burden of debt on industry?"
Well, Only time will say about the future of 4G
in India & is totally dependent on the way this service is offered by
operators.
What customers expect from 4G?
In research, we tried to find the expectations
of customers from 4G services & which of its attributes will attract the
most for consideration of this service.
Price which was least preferred in 3G compared
to data speed bounces back as a most preferred attributes of 4G after
quality of services, from this it can be interpreted that people already using
3G services may not switch over 4G if the price is very high, considering their
happiness with the speed offered by 3G.
Major attributes that can drive the growth of 4G may be Combo Offers, Free 4G handset with fixed monthly rentals for services, High Speed Movie downloads, & Voice calls through the internet with no per minute/second charging. Hence companies like reliance which is expected to launch 4G services should promote this attribute through advertising & promotion.
Conclusion:
From
the analysis & interpretation, we can conclude that customer who are using 2G
services may switch over 3G or 4G services if they are least satisfied with the
current services & are looking for the high speed data services without
giving up the quality of network services. Another reason which will let them
shift from current services is the use of Smartphone, which appeals customers
to use data services.
Customers
wanting to have experience of high speed internet, media file sharing on
whatsapp & other OTT services, net connections to pcs , download large
attachments on mails, real time streaming of music & videos (eg. YouTube)
& Skype video calls are more likely to switch from 2G to 3G services.
These
customers might give less importance for the cost of services over the quality
of services & speed of data. If a customers is least satisfied with 3G
services then there are chances that he/she may switch back to 2G services.
Major
reason for customers not switching to 3G services from that of current 2G
services are the high cost of the services, good satisfaction level with the 2G
services. Other reasons may be that customers are not used to internet services
on phone or maybe they are having wifi at home & office.
It
will be challenging for 4G services to attract customers, especially the ones
who are users of 3G service. These existing 3G users are already using
satisfactory internet services speed & hence to attract them for using the
4G services, it is necessary to create differentiated values.
Based
on this survey customers are more likely to be attracted towards 4G, if
attributes like network quality, price points, combo offers (Internet + Voice +
Cable TV), availability of 4G supported handsets, voice calling without pulse
charging are made available to customers. Out of this Combo offer, Pulse free
voice calling, & high speed file downloads (say Movie in 3-5 mins) will be
differentiating factors to attract customers.
Unlike
2G customers who first look for high speed internet & quality of services
& then give preference for price. In 4G services customers are most likely
going to consider prices over other differentiating services. As per the
question asked on survey people are more likely to pay Rs. 300 to 350 for 1GB
4G data services.
Existing
2G customers are more likely to switch directly on 4G services if prices are
kept low & customers are offered with various differentiating services like
pulse free calling & free 4G handset with the fixed economic monthly
rental.
Limitations
of the research:
Geographical
limitations as the survey was done only in one city i.e.: Mumbai and this
response may not match with the universe at large.
The
study is indicative only and the results are based on the limited sample size
of 250 random customers who are mobile service users in Mumbai service area.
Recommendations:
A company like Reliance
Jio which is expected to launch 4G services in the near future should promote
their services while taking into consideration of various attractive factors.
Better option to attract 3G customers will be by promoting differentiating
services like Combo offers, Pulse less voice calling, & high speed file
downloads (say Movie in 3-5 mins). They should equally take care of various
price points & quality of service. Strategies to attract 2G service user
can be by promoting services like pulse free voice calling & free 4G
handsets on contract basis.
4G
services should be offered in differentiating ways like home & office Wifi,
Combo (TV + Phone+ Internet) etc. Since our ecosystem is not ready with 4G
handheld devices, it necessary to create “on the go wifi” public hotspots which
will offer high speed internet services to those customers who are not having
4G handsets. This will help in increasing the utilization of services.
It is necessary to
attract more customers from 2G services to 3G services which can be done by
lowering the price gap between 2G and 3G services. This could be done either by
reducing 3G data pack prices further & make it closer to the 2G or may by
increasing the prices of 2G data which many companies Airtel & Vodafone has
already followed. But while deciding this price point it is necessary to take
care of customers' willingness to pay because there is possibility that people
might not recharge their internet pack & rely more on home & office
wifi for mobility services.
Utilization of 3G
services can be further increased by offering affordable wifi home & SME
wifi services. This should be offered at competitive prices considering
competitor like MTNL, Tikona, and DNS etc.
Major reason for the
lower rate of migration from 2G to 3G is the cost factor which is seen lower in
Mumbai considering preferences of quality of services & high speed
internet. Hence, companies aiming to improve utilization of 3G services should
concentrate more on quality & speed in metros like Mumbai, where majority
of people find cost at least importance as compared to services factor. At the
same time they should take care in limiting data speed of 2G & increase its
cost which will push subscribers towards 3G services.
Expected
outcome from the recommendations:
4G services with its
differentiating factors will be able to attract more customers & will be
able to utilize its capacity in an efficient way if above mentioned recommendations
are followed.
In the current
competitive market scenario, it necessary for Indian telecom companies to find
different ways to generate revenue. With the entry of OTT services like skype
& whatsapp, revenues from SMS & voice calling are going through decline
trends. It is necessary to generate revenue from different sources. Offering
combo services, Public wifi & Personal home wifi will generate more
revenue.
Using above mentioned
recommendations will help in increasing utilization of network capacity &
thereby will assist in improving returns over investments for debt ridden
telecom companies.
Note: All the facts & figures are taken from the research report .
I don't own any of the pictures shown above, all of them are downloaded from sources
I don't own any of the pictures shown above, all of them are downloaded from sources
