Price Of Handsets Will Be A Limiting Factor
With the recent launch of general packet radio service (GPRS) in Mumbai, BPL Mobile became the first operator in India to offer mobile Internet access using this standard. The GPRS phone allows high-speed data transmission of up to 30 Kbps and can be used to access the Internet through a home personal computer(PC), laptop or pocket PC.
The services are priced at affordable rates, with a monthly fixed charge of Rs 750 ($16) for unlimited GPRS usage with no airtime expenses.
The Smart Investor Team spoke to Kobita Desai, senior analyst with Gartner India Research & Advisory Services about the prospects for such advanced technology services in India.
Do you expect other cellular operators to offer GPRS services as well?
We believe other cellular operators will launch GPRS in the very near future, not necessarily as a follow-up action, but because of market realities. Although voice communication remains the primary service offering, the surge in SMS traffic and increased contribution to revenues have enhanced the business potential of other value-added services.
By rapidly commercialising GRPS, cellular operators can capitalise upon and nurture the demand for data-based services. Targeting the corporate and small-to-midsize business (SMB) segment, e-mail and information-based services are likely to offer the best business prospects.
Are the services attractive at current tariffs? What do you think should be the strategy of a GPRS service provider?
BPL Mobile's innovative tariff plans and lower pricing will give it an edge over its competitors. However, price may not be the battleground for GPRS. GPRS is aimed at high-value subscribers for whom quality of service is the focal point, including availability of network resources, providing relevant content and enhanced customer service.
BPL Mobile would do well to introduce loyalty programs for customer retention, as initially the base will be small and acquisition costs, high. When more operators launch GPRS, BPL Mobile can look at forming alliances to target executives that need Internet access for their laptops.
How do you see the GPRS services market evolving in India?
While relevant content remains a critical marketing focus, the price of handsets will be a limiting factor. A basic GPRS handset could cost between Rs 10,000 ($200) and Rs 50,000 ($1,000). Remembering the target segment, this is going to be a lifestyle statement and low-end phones are unlikely to find favour.
An average handset would cost between Rs 30,000 ($600) and Rs 35,000 ($700), which is high, even for an affluent target market. Cellular operators can consider the following steps to facilitate the adoption of GPRS:
Bundle and subsidise handset sales along with services, possibly through a minimum sign-up period. Offer instalment payback plans for handset purchases, especially for small-and-medium sized businesses, professionals and the entrepreneur segment.
Focus on and localise applications such as location-based services, financial and banking services, corporate e-mail and stock market updates and transactions.
Handset vendors need to work with Indian cellular operators. Ericsson has initiated the "Developers Zone" program in India and plans to work with the cellular operators to develop localised mobile Internet applications. Such collaborative efforts will hasten the adoption of GPRS in India.