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Uninor's dynamic pricing

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The company has just launched an extensive to showcase its latest tariff plan. Will that be enough to make its voice heard?

David MeneghelloThe ‘Kumbh Mela’ in Haridwar this year witnessed some unusual visitors. Employees of provider, Uninor, were manning booths that provided free mobile phone services for those who did not have cell phones but wanted to make emergency calls. Mobile vans from the company, branded ‘Cell on wheels’, also did rounds of the mela.

Besides generating goodwill for Uninor, these served as “perfect” branding exercises, believes Allan Bonke, executive vice-president of the company’s Delhi hub. However, these exercises were not part of a concerted media campaign. It was simply the first phase of making its presence felt after it launched its services last December as the country’s 12th operator. “We will compete hard for every new subscriber,” Stein-Erik Vellan, the company’s Managing Director, says.

It indeed is competing hard. In December 2009 when it started operations, Uninor had only 1.2 million subscribers in around eight circles. That number went up to 5.2 million in 21 circles as in April 2010. The company attributes the performance to its ‘Blue Wave’ strategy under which over 20,000 people went out to the launch circles to personally inform users about the company and its services.

The odds are, however, still stacked against the company. For one, it is still awaiting spectrum in an important circle — Delhi — and parts of states like Rajasthan and Jammu & Kashmir. Second, major telecom operators like Bharti Airtel, and are leagues ahead with over 100 million users and control as much as 50 per cent of the market. And all of them still retain the hunger for growth and are already talking in terms of the next target – 200 million subscribers. Also, competition is tough considering that each of the 21 circles where Uninor operates already has at least half a dozen operators.

On top of that, the environment is tough with quite a few of its competitors dropping tariffs to rock bottom in order to grab customers. Tata

Docomo triggered it with its one-paisa-per-second tariff plan, which was followed by MTS, Aircel and even Bharti Airtel.

David Meneghello, executive vice-president (marketing) of Uninor, however, says the company is well on track to corner 8 per cent share of the total Indian telecom market by 2014 as the brand strategy, he says, has moved from the drawing board to the streets.

The first shot has just been fired. A month back, Uninor launched “Dynamic Pricing” (Badalta 24*7) wherein customers can make calls at 50 paise per minute (or even less) by getting discounts at different locations and different times. For instance, if a subscriber is making a call in Andheri (a suburb of Mumbai city), the network detects the cell site and displays the discounted rate at that time of the day. “If those are not the peak hours, and the lines are not congested in that particular area, the user gets a bigger discount,” explains Meneghello.

Other than India, this strategy has been piloted in markets like Africa and Asia. “There are algorithims that calculate the network capacity and traffic when a call is made. Hence, we can offer calls at prices lower than that of our competitors (referring to the one paise per second billing),” he says.

“This is also a major differentiator for us,” insists Meneghello, adding: “Dynamic Pricing will not only help customers make significant savings on their bills, but also empower them by placing the power of tariffs in their hands.”

This also explains his current brand campaign slogan ‘Ab mera number hai’ which conveys the theme that “it’s your (the consumer’s) turn now”.

“All our communication conveys dynamism. Take our logo. Some think it’s a flower. Others think it’s a propeller. It’s neither. But if you see our TV ads, you will see the logo’s colour changing which represents ‘dynamism’,” says Meneghello.

Uninor, adds Meneghello, is a brand focusing on 22-25 year old customers. “However, our segmentation allows us to concurrently address the younger category (below 22) as well as the more established (above 25) categories.”

Uninor also does not believe in celebrity brand ambassadors. “Our brand is about the everyday young Indian who is restless to succeed. We aren’t about the few who are celebrities in the traditional sense. We are about the billions who are celebrities in their own right,” says Meneghello.

Uninor also has the money to invest in luring customers. Being a joint venture between real estate company Unitech and the $30 billion Norwegian telecom company Telenor ASA (which acquired a 67 per cent stake in Unitech Wireless for around Rs 6,100 crore), it plans to invest around Rs 12,500-13,000 crore over the next five years in India for which it may have to raise debt too.

But it has simultaneously worked out smart deals that will help it save costs. For instance, it does not own towers. Instead, it has signed infrastructure-sharing deals with Wireless-TT Infoservices Ltd (WTTIL) — the tower arm of Tata Teleservices — and Quippo Telecom Infrastructure Ltd (QTIL). Similarly the company had signed a nine-year IT outsourcing contract with Wipro.

“We are here for the long-term. We hope to break even in five years,” says Meneghello. He hopes that the company’s 1,000-odd distribution points, around 100,000 points of sale and over 100 exclusive shops will help his cause.

“We are lucky to have Telenor’s combined global know how and 150 years of telecom experience to back us,” he adds.

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