The lure of 3G notwithstanding, telecom players have a long road ahead if they are to monetise it
That which is well built
will never be torn down.
That which is well latched
cannot slip away.
Those who do things well
will be honoured from generation to generation
Tao Te Ching
The auction of 3G or ‘third-generation’ spectrum has been followed up by the rollout of services that will enable the delivery of a range of next generation services — video streaming, movie downloads, video calls and so on. With as much as Rs 67,719 crore invested by operators in 3G spectrum, they are bound to follow Tao Te Ching’s wisdom in introducing 3G services in the market.
Bharti Airtel is using experiential marketing wherein it has several red-coloured “3G buses” on the move in major cities. Users can step into these buses and have a firsthand experience of 3G mobile services like mobile TV, video calls, high-speed downloads and so on. Its print and outdoor ad screams: ‘Airtel 3G is here’. Tata DoCoMo, known to have one of the largest footprint in retail stores amongst telecom operators, is turning thousands of its shops into “experience stores”. Consumers can walk in and experience services like video SMS, video streaming, mobile television, ultra-high-speed data transfers, route-finder, and live aarti. This assisted experiential marketing would help in making the millions who have not used GPRS yet more familiar with what 3G is all about.
Many of us are familiar by now with Superhero ZooZoo flying all over our TV screens. That was Vodafone’s 3G launch strategy, that is, use its much-appreciated TV ads to announce the introduction of 3G services in India. Superhero ZooZoo stands for the brand personality of 3G — Faster, smarter and better — and helps educate subscribers on this new technology in a simple manner. The different things Superhero ZooZoo does in the TVC indirectly point to the quality of the 3G network that Vodafone aspires to offer. Vodafone is also offering free time-bound 3G trial to its current GPRS subscribers. This not only serves the purpose of pre-purchase service trial but also provides Vodafone with valuable usage data from which it can infer which services are more sought after, how the data consumption is likely to change after mass introduction of 3G services and so on.
On the other hand, Reliance is focusing more on partnerships to offer popular value-added services. It has tied up with Universal Music Group so as to offer music streaming and is promoting its new App Store on Reliance 3G that enables you to get directions while on the road, tips on cooking and yoga, and so on.
Lessons from PSUs
There are some lessons to be learned from BSNL/MTNL in terms of 3G strategies that did not work well. Users found their 2G to 3G SIM card exchange system complicated since one was required to send an SMS as “M3G120” to 53733 and confirm the SMS you get back as “M3G120 Y” to 53733. BSNL’s strategy of offering 3G services at the same price as 2G perhaps weaned subscribers from competition. However, this did not lead to higher data average revenue per user (ARPU) vis-à-vis the 2G network. (In Japan, innovative data plans and highlighting the relevance of 3G services have enabled high penetration and data ARPU.) Moreover, MTNL and BSNL were not able to provide enough marketing thrust to 3G services, thus leading to a lack of awareness of their 3G services. It must not be forgotten that the target customers for a service like 3G prefer young and energetic brands like Airtel and Vodafone.
To provide critical insights in order to close in on a strategy for the deployment of 3G services, the eTech Group@IMRB, active in the area of telecom-related market research for several years now, recently carried out a Syndicated Study on 3G Mobile Services in India christened “The World Of 3nity”. The first round of the study has been conducted amongst as many as 10,000 mobile subscribers and 1,520 establishments across top cities such as Delhi, Mumbai, Chennai, Kolkata, Pune, Ahmedabad, Bangalore and Hyderabad. The study also covers views of several industry experts on the India 3G market. Mobile operators seem to be on the right track since as many as 72 per cent of mobile users assume understanding usage of 3G services would be complicated and someone would need to demonstrate it to them first.
The study reveals that only 9 per cent own a 3G-enabled handset, but 82 per cent are willing to switch to a new (3G-enabled) handset to avail 3G services, provided it lies in the Rs 4,200- 6,400 price band. This is in line with the fact that Indian handset manufacturers have already started offering 3G-enabled handsets at ‘middle class affordable’ prices. With a plethora of handsets in the market, the bigger issue is the pricing of the 3G services. As we know, India is a price-sensitive market and for 3G to percolate to the masses the price would need to be quite low and attractive — to start with. However, that is unlikely to happen given the huge cost of spectrum which itself is scarce and the fact that some of the winners are operating in the low-ARPU voice market.
The consumer segment study was carried out using random sampling with a minimum quota for some aspects such as SEC A, B, C & D and subscribers of the 3G spectrum winners while. The fieldwork was completed in December 2010.
As per the IMRB study, 32 per cent are aware of 3G mobile services. Amongst those who are aware, as many as 93 per cent associate video calling with 3G. Here is what an industry expert says about other 3G services: “Purely utilitarian stuff like traffic signal, map, directions, facilities, restaurants and purely entertainment stuff like gaming, infotainment will be very big. Casual gaming will dominate.”
Video versus voice
The report also reveals even more interesting information — that while video calling may be the most awaited 3G application, the main reason people would consider subscribing to 3G services is that 73 per cent of mobile subscribers believe it will mean better voice quality. Experts believe that in the first instance, 3G will be used by many operators to improve their overall network quality and retain voice customers.
Video calling could well emerge as the next big mobile application. Even the unlettered can use it to communicate. However, there are certain constraints — both sides need a double camera phone. It is ironical that rural citizens who require high-speed applications (telemedicine, e-education) the most can afford them the least. In Korea, the government accelerated the adoption of 3G with subsidies for operators as well as mobile phone manufacturers. In India too, the government and industry would need to work together to take 3G to the villages.
The business segment study was done purposely amongst those involved with mobile/telecom decision-making. In case of SMEs, mobile usage is restricted to voice. Besides, messaging is also used especially by small enterprises. However, awareness of specialised enterprise applications such as ERP and CRM on mobile was found to be abysmal. In order to increase penetration of 3G amongst enterprises, it is important to create higher awareness about how they can utilise 3G for business purposes.
We have seen in global markets that it takes time for 3G to transcend from a technology to becoming a household need. The recent rollout of 3G in China has seen only 4 per cent adoption after two years of aggressive marketing by the players and evident government backing. Since none of the operators have a national footprint we are likely to see partnerships being forged amongst operators to weave together a national offering. And with consolidation in the telecom industry on the cards in the next few years, only time will tell who religiously followed Tao Te Ching’s wisdom.
That which is well built
will never be torn down.
That which is well latched
cannot slip away.
Those who do things well
will be honoured from generation to generation
Tao Te Ching
The auction of 3G or ‘third-generation’ spectrum has been followed up by the rollout of services that will enable the delivery of a range of next generation services — video streaming, movie downloads, video calls and so on. With as much as Rs 67,719 crore invested by operators in 3G spectrum, they are bound to follow Tao Te Ching’s wisdom in introducing 3G services in the market.
Bharti Airtel is using experiential marketing wherein it has several red-coloured “3G buses” on the move in major cities. Users can step into these buses and have a firsthand experience of 3G mobile services like mobile TV, video calls, high-speed downloads and so on. Its print and outdoor ad screams: ‘Airtel 3G is here’. Tata DoCoMo, known to have one of the largest footprint in retail stores amongst telecom operators, is turning thousands of its shops into “experience stores”. Consumers can walk in and experience services like video SMS, video streaming, mobile television, ultra-high-speed data transfers, route-finder, and live aarti. This assisted experiential marketing would help in making the millions who have not used GPRS yet more familiar with what 3G is all about.
Many of us are familiar by now with Superhero ZooZoo flying all over our TV screens. That was Vodafone’s 3G launch strategy, that is, use its much-appreciated TV ads to announce the introduction of 3G services in India. Superhero ZooZoo stands for the brand personality of 3G — Faster, smarter and better — and helps educate subscribers on this new technology in a simple manner. The different things Superhero ZooZoo does in the TVC indirectly point to the quality of the 3G network that Vodafone aspires to offer. Vodafone is also offering free time-bound 3G trial to its current GPRS subscribers. This not only serves the purpose of pre-purchase service trial but also provides Vodafone with valuable usage data from which it can infer which services are more sought after, how the data consumption is likely to change after mass introduction of 3G services and so on.
On the other hand, Reliance is focusing more on partnerships to offer popular value-added services. It has tied up with Universal Music Group so as to offer music streaming and is promoting its new App Store on Reliance 3G that enables you to get directions while on the road, tips on cooking and yoga, and so on.
Lessons from PSUs
There are some lessons to be learned from BSNL/MTNL in terms of 3G strategies that did not work well. Users found their 2G to 3G SIM card exchange system complicated since one was required to send an SMS as “M3G120” to 53733 and confirm the SMS you get back as “M3G120 Y” to 53733. BSNL’s strategy of offering 3G services at the same price as 2G perhaps weaned subscribers from competition. However, this did not lead to higher data average revenue per user (ARPU) vis-à-vis the 2G network. (In Japan, innovative data plans and highlighting the relevance of 3G services have enabled high penetration and data ARPU.) Moreover, MTNL and BSNL were not able to provide enough marketing thrust to 3G services, thus leading to a lack of awareness of their 3G services. It must not be forgotten that the target customers for a service like 3G prefer young and energetic brands like Airtel and Vodafone.
To provide critical insights in order to close in on a strategy for the deployment of 3G services, the eTech Group@IMRB, active in the area of telecom-related market research for several years now, recently carried out a Syndicated Study on 3G Mobile Services in India christened “The World Of 3nity”. The first round of the study has been conducted amongst as many as 10,000 mobile subscribers and 1,520 establishments across top cities such as Delhi, Mumbai, Chennai, Kolkata, Pune, Ahmedabad, Bangalore and Hyderabad. The study also covers views of several industry experts on the India 3G market. Mobile operators seem to be on the right track since as many as 72 per cent of mobile users assume understanding usage of 3G services would be complicated and someone would need to demonstrate it to them first.
The study reveals that only 9 per cent own a 3G-enabled handset, but 82 per cent are willing to switch to a new (3G-enabled) handset to avail 3G services, provided it lies in the Rs 4,200- 6,400 price band. This is in line with the fact that Indian handset manufacturers have already started offering 3G-enabled handsets at ‘middle class affordable’ prices. With a plethora of handsets in the market, the bigger issue is the pricing of the 3G services. As we know, India is a price-sensitive market and for 3G to percolate to the masses the price would need to be quite low and attractive — to start with. However, that is unlikely to happen given the huge cost of spectrum which itself is scarce and the fact that some of the winners are operating in the low-ARPU voice market.
The consumer segment study was carried out using random sampling with a minimum quota for some aspects such as SEC A, B, C & D and subscribers of the 3G spectrum winners while. The fieldwork was completed in December 2010.
As per the IMRB study, 32 per cent are aware of 3G mobile services. Amongst those who are aware, as many as 93 per cent associate video calling with 3G. Here is what an industry expert says about other 3G services: “Purely utilitarian stuff like traffic signal, map, directions, facilities, restaurants and purely entertainment stuff like gaming, infotainment will be very big. Casual gaming will dominate.”
Video versus voice
The report also reveals even more interesting information — that while video calling may be the most awaited 3G application, the main reason people would consider subscribing to 3G services is that 73 per cent of mobile subscribers believe it will mean better voice quality. Experts believe that in the first instance, 3G will be used by many operators to improve their overall network quality and retain voice customers.
Video calling could well emerge as the next big mobile application. Even the unlettered can use it to communicate. However, there are certain constraints — both sides need a double camera phone. It is ironical that rural citizens who require high-speed applications (telemedicine, e-education) the most can afford them the least. In Korea, the government accelerated the adoption of 3G with subsidies for operators as well as mobile phone manufacturers. In India too, the government and industry would need to work together to take 3G to the villages.
The business segment study was done purposely amongst those involved with mobile/telecom decision-making. In case of SMEs, mobile usage is restricted to voice. Besides, messaging is also used especially by small enterprises. However, awareness of specialised enterprise applications such as ERP and CRM on mobile was found to be abysmal. In order to increase penetration of 3G amongst enterprises, it is important to create higher awareness about how they can utilise 3G for business purposes.
We have seen in global markets that it takes time for 3G to transcend from a technology to becoming a household need. The recent rollout of 3G in China has seen only 4 per cent adoption after two years of aggressive marketing by the players and evident government backing. Since none of the operators have a national footprint we are likely to see partnerships being forged amongst operators to weave together a national offering. And with consolidation in the telecom industry on the cards in the next few years, only time will tell who religiously followed Tao Te Ching’s wisdom.
The author is Group Business Director, IMRB
