Friday, March 27, 2009
Prophetic as it may seem, the official launch of Sistema-Shyam's mobile service in India, under the MTS brand, indeed appears to portend the beginning of a slowdown in the great Indian mobile story that has thus far been steaming ahead. With Sistema being the first of five new entrants to get off the ground, along with expansion from incumbents, the word competition just got a whole new meaning. Also, with the subscriber base likely to rise strongly over the next two years, and slowing down therefrom, the battle for top-line and bottom-line growth is only likely to get more intense, pushing back payback periods.
Sistema appears to have recognized the new imperatives of the market and the impact that it is likely to have. Their break-even, which they have hinted at seven years, suggests the same. More than the increase in competition, it will be interesting to see how some of these global majors bring their expertise and strategies into the Indian market. MTS has been following a micro-segmentation strategy of its consumers based on demographic and behavioral patterns, and to add, with reasonably strong success. Operators in India, have thus far been using one-size-fits-all solutions. With it's low cost and segmented strategy, it will be quite interesting to see the strategy that MTS adopts and incumbent operator response to it. Early indicators of MTS' strategy appear to be seen in the variety of special value vouchers that it has already launched. Likewise, it will also be interesting to see how Telenor, with its GSM focus and strong experience in other emerging markets, plays out in the Indian context. Moving beyond current land-grab strategies will prove the litmus test for incumbents, and new entrants sure will play their part in playing spoilsport for the incumbents.
Saturday, March 21, 2009
Yet another MVNO is launching in the US next week. And this one hopes to achieve success with a twin combo of VoIP and flat rate plans and completes the combination with a prepaid plan. Zer01 Mobile hopes to achieve what multiple others have tried and failed at. Run a successful MVNO! The model, as in the case of multiple other MVNOs is quite interesting. The company claims to have developed it's own applications for most of the current smart phones, and all calls are routed through VoIP by it's application that is closely integrated with the handset dialpad. The company's business model appears to be intriguing in ways more than one. They claim to have their own IP backbone, and rely on roaming agreements with AT&T and T-Mobile. And incredibly enough, also claim to have fine-tuned their VoIP platform to even work on GPRS & EDGE networks!! Remains to be seen if they actually go beyond their closed beta and launch commercially. Success, however, is an altogether different ball-game.
High costs of subscriber acquisition coupled with extremely ambitious targets have seen many an MVNO burn cash like there's no tomorrow. Indeed, apart from Virgin Mobile in the UK, there aren't too many successful MVNOs across the world. Of course, there are some of the smaller, interesting and arguably successful examples across some of the Benelux countries, and then there's the new kid on the block, Blyk.
India's experiment with MVNOs, although still caught in regulatory and inter-departmental conflict, will be quite interesting to see. With limited uptake of data services, and a larger problem surrounding scarcity of spectrum, it will surely take some serious thinking to break the MVNO conundrum !
Tuesday, March 17, 2009
Came across this comprehensive report on performance of various segments of Indian media in 2008.