Mobile tariffs in India are among the lowest in the world. Intense competition in the industry continues to put downward pressure on tariff levels, and the declining trend is accelerated by customers' price sensitivity and subscriber growth from the bottom of the socio-economic pyramid. The price war among operators has intensified recently, and some of the price plans offered are of questionable financial viability. This report discusses operators' current pricing strategies for low-ARPU customers, and ways that pressure to engage in a price war can be mitigated.
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Report Table of Contents:
Executive summary
In a nutshell
Key messages
Intense competition putting massive pressure on tariff levels
While some price plans are unviable, a few are apt for low-ARPU customers
Aggressive pricing is ultimately a zero sum game
However, financial loss can be permanent
Larger incumbents are better positioned to survive the price war
Ovum view
Differentiation and value-based pricing can slow tariff decline
Dynamic pricing as one key solution
Ad-subsidised or funded pricing is another option
Rural customers can be served profitably through sponsored plans
Collect calls: Indian adaptation of a developed world pricing model
Industry dynamics and its impact on pricing
Liberalisation paved the way for tariff decline
A crowded market fostering fierce competition
Price sensitivity and a lack of customer lock-in
Subscriber growth from the bottom of the pyramid
Lack of service differentiation
Prevalent pricing strategies
A mixed bag of inventive and reactionary offerings
Per-second billing
Now a norm rather than a differentiator
When everything changes, everything stays the same'
'except for the profit margin
Large and national long distance (NLD) operators are better positioned to absorb the loss
List of Figures
Figure 1: IT services spend in China
Figure 2: Map of China's 20 selected outsourcing locations
Figure 3: Foreign direct investment in China
About Ovum
Ovum fully understands convergence across telecoms, IT services and software. They invest heavily in researching what is happening in a market that is dynamic and full of risk and reward, analysing the changes and identify the threats and opportunities ahead for their clients. Ovum's team has extensive experience in the sector and is dedicated to 'getting closer' - to the industries they advise on, to the people they work for, and ultimately to the real issues determining how ICT markets behave. Ovum maintains a fluid, highly collaborative structure that brings the right range of expertise to each situation. View more research from Ovum at http://www.fastmr.com/
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
