The year 2009 has been one of development for Unisys. Having simplified its corporate message, it has spent much of the last 12 months refining this across its business units, including its public sector business, where it has worked on its service offerings to bring to market a portfolio that will build and grow its existing business.
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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
Per-call pricing
TTSL and Reliance are the only takers so far
TTSL is gaining market share, but it might be losing money
Although less risky financially, Reliance's plan is also less attractive
Free minutes and lifetime validity for local on-net calls
MTS is the only operator to offer such a plan
Upfront payment and customer lock-in may compensate for ARPU loss
Static tariff discounting
Different tariffs for different times of day
Fine strategy to tie price reduction with cost reduction
Although easy and cheap to implement, the model also has limitations
Discounted tariffs for on-net calls
Defensive strategy to pass on cost savings to customers
Incumbents are better positioned to benefit from such pricing plans
Connection with lifetime validity
Low-cost strategy to target low-usage customers
Low-value recharge
'Sachet pricing' approach to overcome affordability challenges
Discounted pricing for rural cooperatives
A win-win solution to increase penetration in rural India
Handset micro-financing
An innovative approach to acquire and retain poor customers profitably
Pricing for profit while growing market share
A tricky balance
Realtime mobile pricing
More robust solution than currently adopted static discounting
High cost of the solution is a hurdle to adoption
Segmentation and value-based differentiation
Differentiation based on network quality
Differentiation based on customer care
Differentiation based on value-added services
Advertising-
Targeted advertising provides additional revenue opportunities
Current injudicious methods underplay the potential of this model
Learning from web portals to adopt advertisement-
Subsidised and sponsored connections
Partnering with non-telecoms companies
Partnering with the government
'Collect call' pricing
Reversing 'calling party pays' rule
Suitable offering for dependents, domestic workers and migrants
List of Figures
Figure 1: Per-second billing plans: per-minute economics
Figure 2: TTSL's per-call pricing: off-net local per-call economics
Figure 3: TTSL's per-call pricing: growing loss with increase in call duration
Figure 4: Reliance's per-call pricing economics
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.
