New operators might be on the dock after Supreme Court cancelled their licences. But that is not stopping them from fighting to win more subscribers.
A few days back, Sistema Shyam announced a new tariff plan, cutting its call rates to almost zero. Called Super Zero, the plan offers its calls within the network at 0.00043 paisa per second, with a special recharge. If a consumer uses all of the 2.4 lakh seconds locally and 60,000 nationally.
From a base tariff of one-paise-per-second, this would effectively mean a 96% drop in tariff. The company calls it innovative tariff. “This is a first of its kind initiative by any telecom operator in India,” the company spokesperson said.
Jaideep Ghosh, a partner, KPMG Advisory Services said that the plan will not just help the company utilise network space better, but also ensure re-charges. “This will also protect subscribers from churning out rapidly,” he said.
Ever since the Supreme Court cancelled 122 licences of eight companies, they have become targets for predatory marketing from other operators. A day after the SC decision, Vodafone put up an advertisement which said everyone is welcome. Operators, whose licences are not in trouble, are known to have made calls to consumers asking them to shift to their networks via mobile number portability (MNP).
Uninor too is doing its bit to counter operators who are trying to wean away their consumers. “Just this weekend, Uninor has secured three lakh new customers, more than it ever has in a weekend since the start of operations. We we are right now very motivated to prove a point,” said a company spokesperson, in response to a query.
Uninor also said that they are angered by tactics being used by competitors, like use of misinformation and targeting their channel partners and customers. “This anger has now translated into energy,” the company said.
Experts feel that more operators whose licences are cancelled might take this route to retain subscribers, and also win more of them. “These new plans will proves that it is business as usual at the companies,” said a company official whose licences have been cancelled.
Tariff cuts and new tariff plans will come in handy to many companies like Sistema Shyam and Uninor, who have been touted as the most aggressive of all the new companies which have received licences in 2008. While CDMA player Sistema has been around 15 million subscribers, Uninor has 36 million subscribers. Other new licencees like Etisalat DB, Videocon, Loop and others have not had such success with gaining subscribers.
Alok Shende, the co-founder and principal analyst at Ascentius Consulting says that new tariff plans and tariff cuts would help these companies re-bid for spectrum whenever the auctions come up. More number of subscribers and better revenue per user, would mean better valuations.
“My hunch is that operators which had to face the brunt, will come back with aggressive pricing. If these operators are re-bidding for spectrum, then it will become a challenge if other companies take away their subscribers when they come back with legitimate spectrum,” said Shende.
The parents of many of these companies have already started taking a hit on their balance sheets over India operators. Yesterday, UAE-based Etisalat Communications, the parent company of Etisalat DB, wrote off Rs 4,048 crore from its value of its India operations. Last week, Telenor took a hit of around Rs 3,547 crore from its Indian joint venture-Uninor.
Experts however do not foresee a full blown tariff war between companies, yet again. “It is between a few players and not all of them might participate, it cannot be a tarriff war once again,” said a sector expert.
