You are here: Home » Opinion » Columns
Business Standard

Sunil Jain: Top of the pyramid

Sunil Jain  |  New Delhi 

Management guru CK Prahalad popularised the concept of the fortune at the bottom of the pyramid (BOP), and among others, the country's top mobile phone players seem to be taking this quite seriously given how they’re wooing BOP customers. It is, however, not quite clear how this strategy will pay off.According to a study by consulting firm BDA with chamber of commerce Ficci, the top 9 per cent of mobile phone users in India contribute 29 per cent to industry’s revenues and 45 per cent of profits; the next 20 per cent of subscribers contribute 44 per cent to revenues and 40 per cent to profits.

The lower end of the pyramid — 71 per cent of subscribers — contributes a mere 27 per cent to revenues and an even smaller 15 per cent to profits. With the collapse in average revenues per user (Arpu) expected to be staved off only with the introduction of 3G services which are to be used by the top 12-13 per cent of users, the bulk of the profit will continue to come from high-end users. Given this reality, and with number portability around the corner, the real battle has to be for the top-end customers.

 

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, January 22 2009. 00:00 IST
RECOMMENDED FOR YOU
.