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Mobile prepaid market: ‘Lifetime Validity’ the new battle ground

28-December-2005
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Mobile prepaid market: ‘Lifetime Validity’ the new battle ground

Tata Indicom has ‘Non-stop Mobile’; Airtel calls it ‘Lifetime validity Prepaid’, Hutch has a new scheme called ‘Chalta Rahe Prepaid’, Idea Cellular has ‘Lifelong Prepaid’, Reliance and MTNL, too, have announced their respective new schemes for lifetime validity without recharge. Whatever these schemes maybe christened, the crux remains that the mobile market has undergone a sea change.

With mobile telephony skyrocketing in numbers to reach 62 million subscribers and the major chunk around 70-80 per cent being contributed by the prepaid segment, it is only in order to see this segment being offered ‘more’ by the operators. Though all operators claim that their offering is a unique one and their scheme is the ‘first’, it is proving to be a daunting task to announce the pioneer.

Nevertheless, the basic idea is that the market is on the verge of a major expansion and in all earnest, Tata Indicom has in a way led the pack by launching ‘Non-stop Mobile’ scheme in which a user can buy a handset and a connection and receive free incoming calls for a period of two years, without recharging regularly.

The other operators have taken further steps and launched lifetime free validity schemes. For instance, Airtel has scored in offering complete lifetime validity which is of Rs 999, and so has Hutch, but the difference is that unlike Airtel, Hutch subscribers will need to recharge with the minimum available recharge (currently just Rs 10) at least once in six months to stay mobile. Meanwhile, Idea and Reliance both offer the lifelong validity service at Rs 995. Idea Cellular, however, has extended a similar Rs 995 proposition to its post-paid subscriber as well.

With these prepaid talktime vouchers, are we seeing the death of validity?

Hemant Sachdev, Group Chief Marketing Officer and Director-Mobility, Bharti Tele-Ventures was of the opinion, “We have steered the course of the telecom industry ever since its inception. The new lifetime prepaid from Airtel takes affordability to a whole new level. It will open up new segments of the market from the very young to the old, from small towns to rural clusters, to young users in urban and semi urban metro cities. It is yet another revolutionary offering and falls in line with our commitment to make mobile a way of life in India. We are talking about the C & D class socio-economic strata, we are talking about the 12-17 year old segments, we are talking about house body women and we are also talking about the semi-urban and local clusters. We see the market opening up with products such as lifetime validity and definitely it is the beginning of a new era in mobile telephony where validity will no longer be criteria for the prepaid user.”

“No, it is not true that these lifetime validity schemes indicate at death of validity as there are different segments of customers and the choice has to be with them to choose when, how much and what applications he/she needs to pay for,” asserted Pradeep Srivastava, Head Corporate Marketing, Idea Cellular, adding, “Rather than having a compulsion to recharge just for validity extension these lifelong schemes help.”

With all following suit, non-voice services like SMS, multimedia services would be the key differentiator for operators and it would contribute a minimum of 10-15 per cent to the top line for major players.

The Indian mobile market is growing fast and definitely has the potential to add many more. As the experts say, the market is predicted to become 300 million subscribers soon. This can be done only by opening up the markets and driving growth via newer segments and the Lifetime Prepaid offerings are indeed a great opportunity for operators to expand the market further and set the telecom sector on a revolutionary path.

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