Absolute perfection comes from the absolute.
That which is well built
will never be torn down.
That which is well latched
cannot slip away.
Those who do things well
will be honored from generation to generation.
(Tao Te Ching).
The recent auction of 3G or ‘Third Generation’ spectrum is seeing the rollout of services by operators to enable delivery of a wide range of next generation services, such as video streaming, movie downloads, video calls, etc. which were not present till now. With as much as Rs 67,719 crore invested by the operators in 3G spectrum, they are bound to follow Tao Te Ching’s wisdom, in introducing 3G services in the market.
Bharti Airtel, is using experiential marketing wherein it has several bright red colored 3G buses on the move in top cities in India. Here mobile users can experience firsthand - 3G mobile services such as telephony such as Mobile TV, Video Call and High Speed Download among others. Many of us would be familiar with the print and outdoor ads that scream “Airtel 3G is here”. Tata DoCoMo - known to have one of the largest footprint in retail stores amongst telecom operators, is turning thousands of its shops into “experience stores”. Consumers can walk in and experience services like video SMS, video streaming, mobile television, ultra-high-speed data transfers, route-finder, and live aarti. This assisted experiential marketing would help in making the millions who have not used GPRS yet more familiar with what 3G is all about.
Many of us would be familiar by now with the Superhero ZooZoo flying all over our TV screens. That was Vodafone’s 3G launch strategy i.e. use its TV ads which have been much appreciated to announce introduction of 3G services in India. The superhero ZooZoo stands for the brand personality of 3G - Faster, smarter and better and helps in educating subscribers on this new technology in a simple manner. The different things the ZooZoo does in the TVC are indirectly pointing to the quality of the 3G network that Vodafone aspires to offer. Vodafone is also offering free time bound 3G trial to its current GPRS subscribers. This not only serves purpose of pre-purchase service trail but also provides Vodafone with valuable usage data from which they can infer which services are more sought after, how the data consumption is likely to change after mass introduction of 3G services, etc.
On the other hand, Reliance is focusing more on partnerships to offer popular VAS. It has tied up with Universal Music Group so as to offer music streaming and is promoting its new App Store on Reliance 3G that enables you to get directions while on the road, cooking to yoga tips, etc.
There are some lessons to be learned from BSNL/MTNL in terms of 3G Services strategies that did not work very well. Users found their 2G to 3G SIM Card exchange system complicated since one was required to send a SMS as “M3G120″ to 53733 and confirm the SMS you get back as “M3G120 Y” to 53733. BSNL’s strategy of offering 3G services at the same price as 2G perhaps helped in weaning away subscribers from competition. However this did not lead to higher data ARPU vis-à-vis 2G network. In Japan, innovative data plans and highlighting the relevance for 3G services has enabled high penetration and data ARPU. Moreover these PSUs were not able to provide enough marketing thrust to 3G services - thus leading to lack of awareness of their 3G services. It must not be forgotten that the target customers for a service like 3G prefers young and energetic brands like Airtel, Vodafone, etc.
To provide critical insights to close in the strategy for deployment of 3G services, the eTech Group@IMRB, active in the area of Telecom related market research for several years now, recently carried out a Syndicated Study on 3G Mobile Services in India christened “The World Of 3nity”. The first round of the study has been conducted amongst as many as 10,000 mobile subscribers and 1,520 establishments across top cities in India which are Delhi, Mumbai, Chennai, Kolkata, Pune, Ahmadabad, Bangalore and Hyderabad. The study also covers views of several industry experts on the India 3G market. The mobile operators seem to be on the right track since as many as 72 per cent of mobile users assume understanding how to use 3G services usage would be complicated and someone would need to demonstrate to them first.
The study reveals that only 9 per cent own a 3G enabled handset, but 82 per cent are willing to switch to a new (3G enabled) handset to avail 3G services, provided it lies in the Rs. 4200- 6400 price band. This is in line with the fact that Indian handset manufacturers have already started offering 3G enabled handsets at ‘middle class affordable’ prices. With a plethora of handsets in the market, the bigger issue is the pricing of the 3G services. As we know India is a price sensitive market and for 3G to percolate to the masses the price would need to be quite low and attractive - to start with.
However, that is unlikely to happen given the huge cost of spectrum which itself is scarce and the fact that some of the winners are currently already operating in the low ARPU voice market. The Consumer segment study was carried out using random sampling with a minimum quota for some aspects such as SEC A, B, C & D and subscribers of the 3G spectrum winners while. The fieldwork was completed in Dec 2010.
As per the IMRB study, 32 per cent are aware of 3G mobile services. Amongst those who are aware, as many as 93 per cent associate video calling with 3G. Here is what an industry expert had to say about other 3G services “Purely utilitarian stuff like traffic signal, map, directions, facilities, restaurants and purely entertainment stuff like gaming, infotainment will be very big. Casual gaming will dominate.” The report also reveals even more interesting information - that while video calling may be the most awaited 3G application, the main reason why people would even consider subscribing to 3G services is that 73 per cent of the mobile subscribers believe it will mean better voice quality. Experts believe that in the first instance, 3G will be used by many operators to improve their overall network quality and retain voice customers.
Video Calling could well emerge as the next big mobile application, however there are certain constraints – for example, both sides need a double camera phone. Moreover it is a way that even the illiterate can use to communicate. It is ironical that rural citizens who require high speed applications (telemedicine, e-education) the most can afford it the least. In Korea, the Government accelerated the adoption of 3G with subsidies for operators as well as mobile phone manufacturers. In India too, the Government and the industry would need to work together to take 3G to the villages.
The Business segment study was done purposively amongst those involved with mobile/telecom decision making. In case of SMEs, the mobile usage today, is more restricted to voice. Other than that messaging is also being used especially by small enterprises. However the awareness of specialized enterprise applications such as ERP and CRM on mobile was found to be abysmally low. In order to increase penetration of 3G amongst enterprises, it is important to create higher awareness about how they can utilize 3G for business purposes.
We have seen in global markets that it takes time for 3G to transcend from a technology to becoming a household need. The recent rollout of 3G in China has seen only 4 per cent adoption after two years of aggressive marketing by the players and evident government backing. Since none of the operators have a national footprint we are likely to see partnerships being forged amongst operators to weave together a national offering. And with consolidation in the telecom industry on the cards in next few years, only time will tell who religiously followed Tao Te Ching’s wisdom.
(Deepak Halan is Group Business Director, IMRB can be reached at firstname.lastname@example.org.)