Innovations in the Indian Telecom Industry

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Case Details:

Report Code : BREP004
Report Length : 21 Pages
Period : 1991 - 2004
Organization : -
Pub Date : 2004
Teaching Note : Not Available
Countries : India
Industry : Telecom

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"In a hi-tech market like telecom, Schumpeter's view that competition through innovation is more important than price holds significance. Technology advancements, lower costs and competition translate this into benefits for the consumer. Moreover, competition drives innovation."

- Poonam Madan Sarmah, Head of Research, Genesis PR.¹

"We are looking at making the phone a more useful product than just an instrument to exchange voices. We want to be identified as a great value-added service provider."

- Harit Nagpal, Vice President (Corporate Marketing), Hutch.²

Introduction

In February 2004, Reliance Infocomm Ltd. (Reliance), India's leading postpaid mobile services provider, entered the prepaid mobile services segment by offering subscription schemes that allowed customers to make use of a digital mobile phone service at an affordable price.

For a price of Rs. 3,500³ for a CDMA enabled Motorola handset, a subscriber could get a free Reliance India Mobile (RIM) prepaid connection and recharge vouchers worth Rs. 3,240. This connection was valid for six months with a grace period of another six months during which the subscriber could receive SMS and incoming calls without having to recharge the account. Similar subscription offers were made on other RIM handsets also.

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If a subscriber purchased an LG handset worth Rs. 6,500, he/she got a free RIM prepaid recharge voucher worth Rs. 6,480 valid for six months. The prepaid subscription offers were seen as a revolutionary step towards making communication and data services affordable to a wider range of customers.

Apart from their price, these offers included several value added services like three way conference call, national roaming, SMS based data services, STD and ISD facility, call forward and voice message service at local mobile rates, etc. Also, RIM prepaid was the only prepaid mobile service in the country that provided data applications and internet connectivity. Commenting on the innovativeness and superiority of these services, S P Shukla, President, Wireless Products and Services, Reliance, said, “RIM Prepaid raises the bar for innovation, quality of service and value added services in prepaid segment of mobile telephony market.”⁴ Industry observers felt that by providing high-end services at affordable prices, Reliance was creating value for its customers...

Contents >>

1] 'Telecom markets – Ringing in Effective Regulations,' www.thehindubusinessline.com, December 12, 2002.

2] 'Where Names Don't Matter,' www.blonnet.com, August 21, 2003.

3] As on April 12, 2004, Rs 1 = US$ 0.0229.

4] 'Reliance Infocomm Storms Prepaid Market, Announces Path Breaking Schemes,' www.relianceinfo.com, February 09, 2004.