Spice Targets Rural Mobile Telephony Market in India*

Details

Case Code : CLBS103
Publication date : 2009
Subject : Business Strategy
Industry : -
Length : 03 Pages
Price : Rs. 100

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Key words:

Market expansion, rural market, bottom of the pyramid, BoP, telecom, teledensity, average revenue per user, ARPU, Spice Telecom, Sabka Spice, Spice S 300 handset, Cellular telephony, cellular telephony, price war, Mobile, low-income earners, semi-literate people, penetration of rural India

Note

* This caselet is intended for use only in class discussions.
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Abstract:

On June 11, 2008, Spice Telecom launched a handset and connection combo called "Sabka Spice" at Rs. 599, targeting the BoP population in rural India and paving the way for Indian cellular service providers to further penetrate into the rural hinterlands of India. India's huge and largely un-penetrated rural market was extremely attractive for telecom companies as they went for volumes at the cost of average revenue per user (ARPU).

Introduction On June 11, 2008, the B.K. Modi controlled Spice Telecom launched a Handset Combo offer called Sabka Spice in which a handset came bundled with a Spice connection. The Spice S 300 handset, available at Rs 599, was specially designed to make mobile telephony accessible to the rural population in India. "We can aptly call this 'sabka mobile' (everybody's mobile). It is cost-effective and easy to use and especially made for the rural population. This combo offer gives economically weaker people a chance to go mobile at an affordable price," said Subodh Srivastava, Chief Operating Officer, Spice Telecom.

Spice Telecom, the brand name for Spice Communications Ltd.'s telecom services, operated in the Indian states of Punjab and Karnataka. The Spice S 300 handset came with a three-year warranty and a choice of Spice pre-paid and post-paid connections...

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