Tata Tele to focus on high-paying customers

Tata Tele to focus on high-paying customers
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First Published: Wed, Mar 28 2007. 11 43 PM IST
Updated: Wed, Mar 28 2007. 11 43 PM IST
Tata Teleservices Ltd (TTSL) plans to shift focus to high-spending, urban and semi-urban consumers, most of them already subscribers of rival cellphone users, by offering a better quality of service. The move is being seen as a strategy to boost average billing among its subscribers.
TTSL has 15 million customers, mostly prepaid, whose bills come to an average of about Rs200 a month, compared to the Rs300 per month enjoyed by rival GSM operators. The two major Indian operators using CDMA technology — Reliance Communications and TTSL — which account for about 30% of the Indian mobile market, have so far focussed almost exclusively on driving growth in their subscribers by offering first-time, predominantly rural users schemes with low-revenue potential. “We are now offering ourselves as an attractive alternative to existing mobile customers, who face problems such as network congestion, dropped calls and poor voice quality,” said Abdul Khan, vice-president in charge of marketing with the Mumbai- headquartered operator.
The ‘churn’ among GSM mobile phone service firms in India is estimated at 4-5% every month.
As part of the shift, TTSL has already launched a marketing campaign. Unlike the old, village-themed spots, the new campaign focuses on up-market consumers, ranging from a well-turned out young lady dealing with dropped calls in a lift to a bridegroom stranded on the highway with no network access.
Analysts said TTSL, which runs mobile services under the Tata Indicom brand, is showing signs of exhaustion from the year-long mad scramble for the first-time and low- spending rural customers. The phone firm was the first to launch a rental-free phone service towards the end of 2005, grabbing nearly 1 million new customers in the first 45 days. “I think the rent-free, lifetime validity party is nearing its end,” says Romil Shetty, director for telecom at the risk assessment services of consultant KPMG India.
CDMA operators have had more success with the first- time, low-income users due to their ability to subsidize the cost of the handsets without running the risk of losing the subscriber and handset to a rival network. As a result, they were able to increase their share of the wireless mobile market from 22% in September 2005 to nearly 30% a year later. While GSM mobile users grew 79% to 91 million, CDMA subscribers in India swelled by 171% to nearly 38.5 million during the same period.
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First Published: Wed, Mar 28 2007. 11 43 PM IST
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